... see a steady growth of her investment over the span of 10 years. John Barrett has a moderate-risk growth profile, and wants to see steady returns over a period of five to six years. The challenge arises on how to allocate their investment funds to meet their desired risk and returns level. With treasury bills, the returns are almost exactly what was promised initially, therefore making them an almost risk-free investment. The returns on T-bills are on average about five percent. Stocks on the other hand, have returns of average 10 percent per year. In this case, companies may eventually experience bankruptcy, which means a depletion of one's stocks in that company, or that company may experience enormous growth, meaning that the investor will experience enormous returns. Therefore, the simulation challenges the consultant to find the right mix of investment options to satisfy the goals of each client. In ...

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