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Mr. Thomas has just inherited $ 1000,000. He could either invest his money in the bank...

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Finance

Mr. Thomas has just inherited $ 1000,000. He could either investhis money in the bank which gives a return of 4% or invest inshares of Monopoly Corp which is the only company in the market.Shares of Monopoly Corp offer an average return of 12% and a riskof 10%.

a) If Mr. Thomas wants a return of 10%, how much money does heneed to invest in shares ?

b) Calculate the risk of his investment strategy.

Answer & Explanation Solved by verified expert
4.0 Ratings (526 Votes)
Investment Amount 1000000Banks rate of return 4Banks risk 0Monopoly Corps average return 12Monopoly Corps risk 10a Mr Thomas wants a return of10He has to invest some portion say    See Answer
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