Use the two portfolios shown in the tables below to answer the questions. Portfolio 1 Asset Category
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Question:
Use the two portfolios shown in the tables below to answer the questions.
Portfolio 1 | |
Asset Category | Percentage of Portfolio |
U.S. small-company stocks | 5 |
U.S. large-company stocks | 10 |
International stocks | 5 |
U.S. government bonds | 50 |
U.S. corporate bonds | 30 |
Portfolio 2 | |
Asset Category | Percentage of Portfolio |
U.S. small-company stocks | 20 |
U.S. large-company stocks | 30 |
International stocks | 25 |
U.S. government bonds | 15 |
U.S. corporate bonds | 10 |
- In your role as a financial advisor, you're advising a client, Sally, a 30-year old computer programmer who makes an above-average salary. She's investing money in her 401(k) that she doesn't plan to use until retirement. In your opinion, which of the two portfolios above would be most appropriate for these funds? In your answer, explain why you believe the portfolio you've chosen is appropriate and explain why the portfolio you didn't choose is not appropriate.
- In your role as a financial advisor, you're advising a client, Bob, who has just retired and rolled over his 401(k) into a self-directed IRA account. Bob intends to use these funds to provide income to live on in his retirement. In your opinion, which of the two portfolios above would be most appropriate for these funds? In your answer, explain why you believe the portfolio you've chosen is appropriate and explain why the portfolio you didn't choose is not appropriate.
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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