How much money should be invested in stocks and bonds?

Question

Suppose you received an unexpected inheritance of 36,000. You have decided to invest the money by placing some of the money in stocks and bonds. To diversify, you decided that five times the amount invested in bonds should equal three times the amount invested in stocks. How much should be invested in stocks? How much should be invested in bonds? 

Answer 1

So we have S + B = 36000

 

since the total of stocks and bonds is 36000

 

Also we have 3S = 5B since three times the stocks equals five times the bonds

 

Substitute S = 5B/3 into the first equation

 

5B/3 + B = 36000

 

8B/3 = 36000

 

B = 13500

 

therefore S = 22500

 

 

Answer 2

how much can you afford to lose?  Caveat Emptor!