Disliked{quote} No no you are going somewhere else with the analysis. Lets keep it very simple for now. Fisher755 answer is the one we are looking for: {quote} Let's go even deeper and make it simpler: Q: If I give you $1000 and ask you to invest. I want the maximum return with obviously the minimum risk: Assumptions: -> We are in country ABC and 10yr yield will cost me -2% (e.g Switzerland) -> Stock XYX in the same period will return 5% What would be your preference as investor: putting the $1000 in Bonds...Ignored
I assume you're illustrating that in your next question about investing 1k
So- Id say you'd take the 5% stock return over the -2% yield cost. You'd switch some or all once the the stock returns no longer offset the yield cost