It has been about 20 years since Julia graduated with a major in aeronautical engineering, and she has been quite successful in her career and her personal finances. Accordingly she wants to sell her home and buy a luxury condominium. She has $40,000 in savings, and she figures that she can continue her savings and investment program for three more years before making a 20 percent down payment on a luxury condominium. The home that she wants to purchase is currently priced at $450,000. Julia thinks she should invest her $40,000 and additional savings during the next three years by using lending investments like certificates of deposit and bonds rather than owning stocks or stock mutual funds. Offer your opinions about her thinking.
Answer to relevant Questions(a) What can you suggest to Lucia about figuring out her investment philosophy? (b) Would you recommend active or passive investing for her, and why? (c) Should Lucia be a lender or owner?(d) Identify three risks to her ...1. Distinguish between investment-and speculative-grade bonds.2. Give some reasons why individuals often invest in corporate bonds rather than Treasuries.3. Summarize the differences among Treasury bonds, I bonds, and TIPS ...(a) If Jessica buys corporate or municipal bonds, what rating should her selections have? Why?(b) Jessica has a choice between two $1000 bonds: a corporate bond with a coupon rate of 5.1 percent and a municipal bond with a ...1. Comment on this statement: “A great time to invest is during times of economic turmoil when assets are undervalued.”2. Review the three objectives of mutual funds. Based on your investment philosophy, which one type ...1. Summarize how the discounted cash-flow method helps determine the right price to pay for a real estate investment. 2. Comment on the wisdom of buying a timeshare as an investment. 3. List three ways to finance a real ...
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