Question

Assume that you were given $100,000 to invest in financial assets. What would your investment portfolio look like? Why?

Answer 1

Solution:

My Investment Portfolio will look as under:

Fixed Deposits/Government Bonds	50%
SIP in Index Funds	30%
Equity	20%

Reasons:

1) First preferences should be risk free investments such as fixed deposits and government bonds @ 50%, Where can we get fixed interest revenue at periodical intervals at less risk.

2) Second preferences should be Systematic Investment Plan (SIP) in Index Funds, Where we can invest the total funds @ 30% in small portions with regular interval of weekly, monthly and yearly duration. The main advantage under this is that our investment will be adjusted to market fluctuations.

3) Lastly preferences should be Equity, Where we can invest @ 20% in high return equity which help to achieve high rate of return. Optimum return and risk will be there under this option.