we have studied the concept of risk and return - so we know the fundamentals. To...

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Finance

we have studied the concept of risk and return - so we know thefundamentals. To assume additional risk, investors will require theopportunity to receive additional return. Additionally, someinvestors by nature are more risk averse than others - this is whatdrives financial markets.

Let's assume that you have just inherited an unexpected large sumof $100,000 for which you have no pressing financial demands andwhich you decided to invest for 10 years to revisit at thattime.

Discuss your investment opportunities and ultimate decision.Include the following in your response:
What categories of investmentswould you consider and why?
Would you be more inclined toinvest in safe options (treasury notes and bonds, CDs) or morerisky investments (stock and bond markets, real estate, gold, fineart, a race horse)?
Would diversification be partof your strategy and why/why not?
Describe the risk/rewardprofile of your investment. Be specific.
To what amount would youexpect your 10 year investment to accumulate. Support yourconclusion.
Explain your reasoning and support it in theory.

Your post should be about two to three well developed paragraphslong.

Answer & Explanation Solved by verified expert

4.0 Ratings (487 Votes)

The categories of investment that I would consider are stocks and bonds Alternative investments and commodities are more suitable to a portfolio that already has exposure to stocks and bonds CDs are a safe option but have low returns As there are no pressing financial demands and the See Answer

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we have studied the concept of risk and return - so we know thefundamentals. To assume additional risk, investors will require theopportunity to receive additional return. Additionally, someinvestors by nature are more risk averse than others - this is whatdrives financial markets.Let's assume that you have just inherited an unexpected large sumof $100,000 for which you have no pressing financial demands andwhich you decided to invest for 10 years to revisit at thattime.Discuss your investment opportunities and ultimate decision.Include the following in your response:What categories of investmentswould you consider and why? Would you be more inclined toinvest in safe options (treasury notes and bonds, CDs) or morerisky investments (stock and bond markets, real estate, gold, fineart, a race horse)? Would diversification be partof your strategy and why/why not?Describe the risk/rewardprofile of your investment. Be specific. To what amount would youexpect your 10 year investment to accumulate. Support yourconclusion.Explain your reasoning and support it in theory.Your post should be about two to three well developed paragraphslong.