Jennifer Buffett is a 33-year-old recent MBA graduate. She has been working since she was 18 and has seen her annual salary grow from $20,000 to $90,000 gross, over the span of 15 years. She rents an apartment and does not own any real estate. Her monthly living expenses are $4,000, including her $200 per month car payment and $700 per month student loan payment. She has no other debt and has savings totaling $50,000. She plans to get married next year and start a family of two children. She works as a marketing manager in a medium-size cosmetics company in Texas.

In this week’s Discussion, you will assess Jennifer’s characteristics and propose a reasonable set of investment objectives and the constraints she might have.

To Prepare

• Review other resources you may access from the Internet.

• Consider the following:

How can the return requirements of an investor be derived on the basis of her/his life conditions and probable personality characteristics?

How can the risk tolerance of an investor be derived on the basis of her/his life conditions and probable personality characteristics?

What possible financial investments would be considered as acceptable once the risk-return tradeoff for an investor has been defined?

Post by Day 3 a 3- to 6-paragraph analysis of Jennifer�s probable investment objectives and constraints. Please make sure to include the following in your analysis:

#1• What is Jennifer’s expected risk tolerance? Please, clearly characterize her risk tolerance and justify your response.

#2• What is Jennifer’s expected return requirements? Please justify.

#3• What possible constraints might Jennifer have for her investment decision? Please justify your response.

Please address clearly each of the questions in 1–2 paragraphs. Make sure you use APA style for your response(s) and properly cite any resources you have used.

Answer rating: 100% (QA)

1 Willingness and ability to accept risk is called Risk Tolerance There are various factors that inf... View the full answer