Reference no: EM133111440

In the context of the current market and economic conditions please describe how you would allocate funds across asset classes for a portfolio that you plan to close out for a large purchase in 5 years. Assume that you need at least a compound annual growth rate of 7% to reach your portfolio size goal but that given your relatively short time frame and need for the funds you have a secondary objective of accepting losses of no more than 5% of the initial portfolio amount.

The asset classes you can choose amongst are as follows:

1. US Treasury Series I Savings Bonds

2. US Treasury Bills

3. US Treasury Bonds

4. Investment Grade Corporate Bonds (either individual or Mutual Fund)

4. US Small Company Stocks (either individual or Mutual Fund)

5. US Large Company Stocks (either individual or Mutual Fund)

6. Emerging Market Stocks (either individual or Mutual Fund)

7. Index Options

8. Cash

You do not need to include all of these asset classes in your answer but you can't include anything outside of these choices. In your answer, you need to give a specific percentage allocation to the asset classes that you choose (that must add up to 100%). In addition please explain your investment thesis for your allocation.