Your grandparents give you $1,000 as a graduation gift; you decide to save 25% in bonds and 75% in Apple stock. If the return to the bonds is 3% and the return to Apple is 15%, then your overall return on wealth would be about:

Question

Quizplus · Accepted Answer

- Amount saved in bonds = 25% x $1,000 = $250
- Return on bonds = 3% of $250 = $7.50
- Amount saved in Apple stock = 75% x $1,000 = $750
- Return on Apple stock = 15% of $750 = $112.50
- Total return on investment = $7.50 + $112.50 = $120
- Overall return on wealth = Total return on investment / Initial investment x 100%
- Overall return on wealth = $120 / $1,000 x 100% = 12%

Your Grandparents Give You $1,000 as a Graduation Gift; You