According to the Standard and Poor's Global Financial Literacy Survey only 4% of children from low-income families will break the cycle of poverty and break into the upper middle class. How does not breaking out of the cycle pf poverty affect their investment planning options?
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- Discuss the US poverty level. Include the issues with public education, housing, American food deserts, and very low min. industry wages in your essay.Within the context of the real estate bubble burst of around 2008, consider the follpwing statements and answer the questions Managers at some banks and mortgage companies have argued that providing subprime mortgages was based on their desire to give poor people a chance to participate in the American dream of home ownership. What is your opinion of this explanation in terms of ethics and social responsibility? What ethical principles or approaches support your opinion?2. Amazon's Housing Equity Fund is supporting the construction of housing for low to moderate-income families in the New York Metropolitan area. True or False
- Mary Mari from Ghana needs your help with the following question: What would happen to Ghana or any other country’s standard of living if people lost faith in the safety of the financial institutions? Explain.In the credit market model with asymmetric information, determine how a consumer will respond to an increase in the fraction of bad borrowers in the population. And discuss how the credit market model with asymmetric information shows how a financial crisis can reduce consumption.Due to the recent outbreak of the COVID-19 pandemic, the operations of many MNCs weredisrupted. One of your friends makes the following statement: “Globalisation is dead! Why areyou wasting your time studying international finance?”.a) How would you respond to her? Please note that your friend is not a business graduate anddoes NOT understand the terminology of business/economics/finance. Therefore, explain why she is wrong (or right). For this part
- Jennifer Jones wants to accumulate wealth, but she has told you, her new financial planner, that she is risk averse. What should you do with her money?a. Invest in products that bring the highest return regardless of risk.b. Invest in products that produce high income because fixed income products are generally low risk.c. Put Jennifer’s assets in 100% cash equivalents because she is risk averse.d. Determine Jennifer's true risk toleranceMore than 40 million Americans are estimated to have at least one outstanding student loan to help pay college expenses (40 Million Americans Now Have Student Loan Debt, CNNMoney, September 2014). Not all of these graduates pay back their debt in satisfactory fashion. Suppose that the following joint probability table shows the probabilities of student loan status and whether or not the student had received a college degree. a. What is the probability that a student with a student loan had received a college degree? b. What is the probability that a student with a student loan had not received a college degree? c. Given that the student has received a college degree, what is the probability that the student has a delinquent loan? d. Given that the student has not received a college degree, what is the probability that the student has a delinquent loan? e. What is the impact of dropping out of college without a degree for students who have a student loan?The Gini coefficient is a measure of the distribution of income across a population. TheGini coefficient, which was developed by the Italian statistician Corrado Gini in 1912, isoften used as a gauge of economic inequality, measuring income distribution or wealthdistribution among a population. Give your opinion on the following. a. Do you think economic inequality is an important issue in society? Explain youranswer. b. Is there a trade-off between equity (equality) and efficiency? Explain your answer. c. Which is more important: equity (equality) or efficiency? Explain.
- Let's say that interest rates on housing loans and hire purchases are falling significantly. So is it recommended from a financial planner's point of view that households should be encouraged to take more debt?Harry, a friend of yours, is taking a course in economics, and has become confused by some of the terminology because of the way people commonly use the same words. The economics professor says investment occurs when companies buy equipment and build factories. Yet Harry has always heard people talk about investing as a method of saving when they put money in the bank or purchase securities. He's confused by these dissimilar uses of the word, and has asked you to explain. After asking for your help, Harry happily states that there's one thing he does understand perfectly about what the econ prof says, and that is "savings equals investment." Since investing in stocks and bonds is also saving money, it's obvious that savings equals investment! Write a brief explanation to help Harry out.What do you think is the best savings product for an (a) working individual, (b) family/household, and (c) senior citizen?