Assume you are doing some personal planning for the management of your portfolio It is early 2012 You have decided to build a portfolio that is either 40 percent bonds 60 percent stocks or 30 percent bonds 70 percent stocks However, at this time an Aggregate U S bond index is yielding only 2 2 perc...

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Assume you are doing some personal planning for the management of your portfolio. It is early 2012.

Question:

Assume you are doing some personal planning for the management of your It is early 2012. You have decided to build a that is either 40 percent bonds/60 percent or 30 percent bonds/70 percent However, at this time an Aggregate U.S. bond index is yielding only 2.2 percent. In order for you to make a judgment as to your likelihood of success, you will need to determine how much will have to return to provide an overall return ranging from 6 percent to 10 percent, as shown in the spreadsheet below.
a. Fill in the spreadsheet below by determining what equity return will (approximately) provide you with the objective shown.
b. Which combination would you choose, based on what you now know about likely equity returns?
Stocks
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