Zahara is concerned about taking on too much risk in her investment portfolio. She has some government bonds and some speculative investments. What is TRUE about her risk levels in investing? She has taken no risks in her portfolio.

Her speculative investments are considered to be low risk.

She should sell her government bonds because they are very risky.

The speculative investments are high risk but can pay returns quickly.

$344,000

Explanation:

The computation of value of investment is shown below:-

Initial Cost of investments         $260,000

(20,000 shares × $13)

Add: Share of profit                     $22,750

($65,000 × 35%)

Add: Increase in equity

reserves                                     $70,000

(($23 - $13) × 20,000 × 35%)

Less: Dividends received            $8,750

($25,000 × 35%)

Value of investment                    $344,000

Therefore the value of investment is $344,000