Sandy is 3 0 years old and has a well - paid job as a commercial lawyer
Question:
Sandy is years old and has a wellpaid job as a commercial lawyer based in San
Francisco. She enjoys spending her money on entertainment, restaurants, and holidays.
She describes herself as ambitious and willing to accept riskier investments if that means
gaining better returns.
Sandys financial information includes $ in investments from salary and bonuses,
$ of rainy day funds in savings and $ in a retirement account. She has
no substantial debts. Her $ portfolio currently invests in equity mutual
funds and in bond mutual funds. She is keen to build up her fund to maintain her
lifestyle and build a family. However, her financial adviser finds her difficult to consider
the nontraditional investments that are available through newly introduced
exchangetraded funds.
As a result of the inheritance, she will receive $ shortly. She plans to invest
$ in speculative funds and the balance in conservative bond funds. She considers
the balance investment extremely important as she would not likely inherit another sum
of money. A severe financial loss can cause a traumatic effect and impact her life
milestone.
Requred
a Analyze the consistency of Sandys risk tolerance level before and after the
inheritance.
bDiscuss the behavioral biases in Sandys inheritance investment approach.
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford