Question

1. What might you say to someone whose reason for investing in 90% bonds and 10% stocks is that they want a 6% return on investment?
2. Use evidence from this graph to explain the value of investing in both stocks and bonds - not just one or the other.

Answer 1

Investing in 90% bonds and 10% stocks will provide an average return of 6% on investment.It is advisable to invest more portion in bonds  is safe and will give higher return for investment than stocks

Explanation:

1. According to the graph investing in 90% bonds and 10% stocks will provide an average return of 6% on investment.

2.Investing in bonds is safe than stocks ., because bonds bear fixed rate of interest ., and investing in the bonds having very less risk than the stocks. By comparing stocks and bonds with the help of graph ., it's very clear bonds has a positive growth starting minimum at 32.6% to maximum at 64.2% as returns .But stocks has a negative growth (value) from -8.2% to maximum -43.1% .,It is advisable to invest more portions in bonds is safe and better than invest in stocks.