Yr 11 Economics

Year 11 Economics- Homerwork Task 6

Part A

Type Risk Expected Return(%) PA Amount ($) % of total investment

ING Savings Maximiser Low 5.40% $75000 35%

Commonwealth Cash investment account Low 5.25% $50000 25%

Westpac Moderate Growth Fund Medium 4.17% $50000 25%

Colonial First Estate Conservative Fund Low 1.7% $25000 15%

The portfolio shown in the table above I feel is ideal for Hugh Jackman. He wishes to invest $200,00 and does not want to risk losing

any of his money.

Therefore I have chosen to invest the money all in banks with good rates of interest these being 5.40, 5.25, 4.17 and 1.7. These have been chosen as they are very low risk but also will provide more money as they have good interest levels. These accounts have been specifically chosen to suit Hugh Jackman's needs. The main reason in which I decided to invest the money in banks is the fact that Hugh is scared of the volatile economy, therefore banks are the safest options rather than investing in a stock trading company where prices are likely to plummet or rise on a regular basis, whereas banks are very steady. The risks are not very high but due to this the potential gains will not be very high, although gains will occur due to the high levels of interest in the chosen accounts.

Part B

Part C

i) If interest rates reduce it will not be good for your account, as you will be earning less interest on the existing money in your account. Also share prices are