QUESTION IMAGE
Question
29
adjust the percentages of chris investments to make his portfolio one with potential for high growth
bond
mutual fund
stock
savings account
Step1: Understand high - growth portfolio
For a high - growth portfolio, we need to allocate more to assets with higher growth potential. Stocks have "Highest risk, highest growth", mutual funds have "Moderate risk, moderate growth", bonds and savings accounts have lower growth (bonds: "Low risk, low growth"; savings account: "Lowest risk, lowest growth"). So we should increase the percentage of stocks and mutual funds, and decrease the percentage of bonds and savings accounts. Let's assume we want to make stocks a larger portion. Let's say we increase stocks to 50% (we can adjust as long as the total is 100%). Then we need to adjust the others. Let's start with the current percentages: Bond: 25%, Mutual Fund: 25%, Stock: 25%, Savings Account: 25%. We want to increase Stock. Let's use the + button for Stock. Each + (or -) probably changes the percentage by a certain amount (e.g., 5% or 1% - but from the labels, let's assume we can adjust. Let's aim for a portfolio with more stocks. A common high - growth portfolio might have 60% stocks, 20% mutual funds, 10% bonds, 10% savings. But let's work with the interface. The Stock is currently 25% (purple), Bond 25% (green), Mutual Fund 25% (cyan), Savings 25% (red). To increase growth, we need to increase Stock (highest growth) and maybe Mutual Fund (moderate growth), and decrease Bond and Savings (low growth). Let's increase Stock: click the + button for Stock. Let's say each click increases by 5%. So first click: Stock becomes 30%, then we need to decrease another asset. Let's decrease Savings (lowest growth) by clicking - for Savings. So Savings becomes 20%, Stock 30%. But we need the total to be 100%. Let's do a more significant adjustment. Let's set Stock to 50% (so we click + five times if each is 5%: 25 + 55 = 50). Then we need to reduce the other three by a total of 25% (since 100 - 50 = 50). Let's reduce Bond to 10% (click - three times: 25 - 53 = 10), Mutual Fund to 20% (click - once: 25 - 51 = 20), Savings to 20% (click - once: 25 - 51 = 20). Now we have Bond:10%, Mutual Fund:20%, Stock:50%, Savings:20%. Total:10 + 20+50 + 20 = 100. This is a high - growth portfolio as Stock (highest growth) is the largest portion.
Step2: Adjust the percentages
- For Stock (purple, "Highest risk, highest growth"): Click the + button multiple times to increase its percentage. Let's assume each + increases by 5%. Start with 25%, click + five times: 25 + 5×5 = 50%.
- For Bond (green, "Low risk, low growth"): Click the - button three times (each - decreases by 5%): 25 - 5×3 = 10%.
- For Mutual Fund (cyan, "Moderate risk, moderate growth"): Click the - button once (decrease by 5%): 25 - 5×1 = 20%.
- For Savings Account (red, "Lowest risk, lowest growth"): Click the - button once (decrease by 5%): 25 - 5×1 = 20%.
Now the percentages are Bond:10%, Mutual Fund:20%, Stock:50%, Savings:20%, which sums to 100% and has a high - growth orientation (more in high - growth assets: Stock and some in Mutual Fund, less in low - growth assets: Bond and Savings).
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A possible adjusted portfolio for high growth: Bond: 10%, Mutual Fund: 20%, Stock: 50%, Savings Account: 20% (adjust using the + and - buttons as per the interface to achieve this distribution, focusing on increasing Stock (highest growth) and reducing low - growth assets like Bond and Savings Account).