(Answered) The investor has a liquid net worth of 1000000 of which 40

Engineering

The investor has a liquid net worth of $1,000,000 of which 40% is invested in the S&P 500 index, 40% in a medium-duration, high quality bond fund and 20% in a savings account earning 5% interest per year. You are to determine if the investor should take $100,000 from the savings account and purchase $100,000 of the selected company's common stock. The investor is 25 years from retirement.

You will invest it all in one of the following investments - these are your only 2 options:

A. A bank account earning 5% per year.

B. Common stock:

Cheesecake Factory Inc. (CAKE)

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