Janet Lopez is establishing an investment portfolio that will include stock and bond funds

Janet Lopez is establishing an investment portfolio that will include stock and bond funds. She has $720,000 to invest and she does not want the portfolio to include more than 65% stocks. The average

Janet Lopez is establishing an investment portfolio that will include stock and bond funds. She has $720,000 to invest and she does not want the portfolio to include more than 65% stocks. The average annual return for the stock fund she plans to invest in is 18% whereas the average annual return for the bond fund is 6%. She further estimates that the most she could lose in a year in the stock fund is 22% whereas the most she could lose in the bond fund is 5%. To reduce her risk, she wants to limit her potential maximum losses to $100,000

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