James Stephenson Investment Profile 1. Underline the word at right that best describes the client's: 2. Discuss
Question:
James Stephenson Investment Profile
1. Underline the word at right that best describes the client's:
2. Discuss appropriate client objectives:
A. Risk
B. ReturnType of investor Asset base Statedretum desire or investment goal Annual spending needs Annual income from nonportfolio sources (before tax) Otherretum factors Risk considerations Individual; surgeon, 55 years of age, in good health $2 million 10 percentage points above the average annual retum on U.S. small-capitalization stocks S150,000 S350,00 from surgical practice Inflation is 3% Owns large concentration in U.S. small- capitalizati on stocks 70,000 chaitable donation in 10 months Specific liquidity Tme specifications Retirement at age 70 Income and capital gains taxed at 30 percent ax concams A. Willingness to accept risk B. Ablity to accept risk C. Risk tolerance D. Liquidity requirement E. Tme horizon F. Oveall time hoizorn G. Tax concems Below average Bedow average Below average Significant Above average Above average Above average Not significant tage ultistage Short to intemediate Long-tem Significant Not significant
Step by Step Answer:
1 Underline the word at right that best describes the clients 2 Discuss appropriate client objectives A Risk Stephenson has an aboveaverage risk tolerance based on both his ability and willingness to assume aboveaverage risk His large asset base long time horizon ample income to cover expenses and lack of need for liquidity or cash flow indicate an above average ability to assume risk His concentration in US smallcapitalization stocks and his desire for high returns indicate substantial willingness to assume risk B Return Stephensons financial circumstances long time horizon sizable asset base ample income and low liquidity needs and his risk tolerance warrant an aboveaverage total return objective ...View the full answer
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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