Question

The Week 2 Case Study Assignment is the first part of a series of analytical tasks, spanning several weeks. Your task involves an analysis of general economic conditions or systematic risk, i.e., the risk that affects all industries and companies, in the U.S. macroeconomy. Your goal is to determine in percentage terms an optimal allocation of $1,000,000 among the following three asset classes: U.S. equities, U.S. Treasury bonds, and cash. In Week 2, submit your analysis of U.S. equities.

The goal is to maximize your expected return over the next 12 months.

Write a 1 to 2-page paper providing your analysis of the asset classes' prospects and your justification of your allocation of monies among them.

Answer 1

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Answer Analysis of Asset classers question there per given are three classes of Us-Equities us-Treasuty Cast Us-Equities is an asset class that invest in common stocks of the companies listed in us stock exchanges The risk is highest among all asset dasses as retorn is also Highest By Investing in Equity, you will get the ownership ! in company. so you will entitte for voting rights, Diui dends, Bonus, splits & Rights Issue S&P 500 has given annual return CCAGR) of tot 18% 16% - 18 T since past from 1970-2007. Us- Treasury us- Treasury is a Debt asset class, whose the safest in het all the asset classes. It is backed by o us govt & Fede returns are Returns are fixed, risk is very low. As of now, us Treasury has never defaulted Many Cosporates uses US-Treasury as thier Liquid Fundo Cash is nothing the cash-currency or Bank Balance, you hold in the account

Justification As per my standard sules, the money in the Debt or us Generally we invee Treasury is as pe For example, Investor who is 30 year old, His 30 % should be invested in Debt & tot inequity. Investor , who is 70 year old, then we invest 707 in Debt & 307. in Equity.