Alva Reese is 65 years old and getting ready to retire. She called her investment broker to

Question:

Alva Reese is 65 years old and getting ready to retire. She called her investment broker to help her decide what to do with the $50,000 that she has in the stock market. Alva told him that she didn’t want any risky investments but hoped for an investment that was relatively safe and offered steady income. She had heard that bonds were safer than stocks and asked the broker how he felt about bonds. Her broker said bonds were a good safe choice and the ones he had in mind would offer her a high yield. He recommended that she invest all $50,000 in corporate callable bonds. Alva asked him to explain what callable bonds were and he told her the explanation was too technical but they were a safe investment that would serve her needs.

1. What information should the investment broker have given Alva?

2. Are all bonds safe? Why or why not?

3. Write a short paragraph describing how to determine the sales (trading) price of a bond.

4. In groups of three or four, make a list of the factors that Alva and the investment broker should consider before deciding how to invest the $50,000.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...