Question

adjust the percentages of chriss investment to minimize the risk in his portfolio
bond (low risk, low growth) 10%
mutual fund (medium risk, medium growth) 20%
stock (higher risk, higher growth) 50%
savings account (lowest risk, lowest growth) 20%

Explanation:

To minimize risk, we should allocate more to lower - risk investments and less to higher - risk ones.

Step 1: Analyze the risk levels

• Savings Account: lowest risk, lowest growth. Current allocation: 20%.
• Bond: low risk, low growth. Current allocation: 10%.
• Mutual Fund: medium risk, medium growth. Current allocation: 20%.
• Stock: higher risk, higher growth. Current allocation: 50%.

Step 2: Adjust the allocations

We need to decrease the percentage of Stock (higher risk) and increase the percentages of Savings Account and Bond (lower - risk). A common way to minimize risk is to have a larger portion in the lowest - risk (Savings Account) and low - risk (Bond) investments. Let's aim for:

• Savings Account: Increase to, say, 40% (by using the + button on Savings Account until we reach 40%).
• Bond: Increase to, say, 30% (by using the + button on Bond until we reach 30%).
• Mutual Fund: Keep at 20% (medium risk, can be a small portion for some growth).
• Stock: Decrease to 10% (by using the - button on Stock until we reach 10%).

Let's check the total: \(40\%+30\% + 20\%+10\%=100\%\)

(Note: The exact numbers can vary slightly as long as we are increasing low - risk and decreasing high - risk, but the key is to reduce the stock percentage and increase savings and bond percentages.)

For example, let's do the step - by - step adjustment:

Adjusting Stock (from 50% to 10%):

We need to decrease by \(50 - 10=40\%\). Each time we press the - button on Stock, we decrease the percentage. Let's assume each press decreases by a certain amount (usually 1% or 5%, but from the interface, we can press the - button multiple times. Let's say we press the - button on Stock 40 times if each press is 1%, but in the interface, maybe it's in steps. Alternatively, we can calculate the number of presses. If each - press reduces by 1%, we need 40 presses.

Adjusting Savings Account (from 20% to 40%):

We need to increase by \(40 - 20 = 20\%\). So we press the + button on Savings Account 20 times (if each + is 1%).

Adjusting Bond (from 10% to 30%):

We need to increase by \(30 - 10=20\%\). So we press the + button on Bond 20 times (if each + is 1%).

After these adjustments, the portfolio will have a lower overall risk as we have more in low - risk (Savings Account, Bond) and less in high - risk (Stock) investments.

Answer:

A possible adjusted portfolio to minimize risk is: Bond: 30%, Mutual Fund: 20%, Stock: 10%, Savings Account: 40% (or other similar allocations with more in low - risk and less in high - risk investments). The key action is to decrease the Stock percentage (using the - button on Stock) and increase the Savings Account and Bond percentages (using the + buttons on Savings Account and Bond) until the portfolio is more weighted towards low - risk investments.