Bob Smith is saving for the down payment on a new car. If he is very careful with his money, he will have the full down payment in six months. Because his time frame is short, he is deciding between a low-risk saving option and a moderate-risk investment account. What would you recommend for Bob in these circumstances and why?Jinhee Lee just graduated from college and began her first job. She has always wanted to buy a condo and believes that she could save enough for the down payment in three to five years. Would you recommend Jinhee place her money in a low- or moderate-risk investment vehicle? Why do you recommend this choice?Juanita Romero is 16 and has earned some extra money at her summer job. She decides to invest it and let it grow until retirement. She has 49 years until retirement and realizes she can accept some risk. She’s deciding between an investment that has moderate risk and one that has a slightly higher risk and the possibility of a higher return. What would you recommend Juanita choose and why?Reamon and Keesha Wilson have 2-month-old baby girl and they are already planning for her college costs. The deposits a small amount into a savings account but are looking for several different investment option. Do you recommend that the Wilson’s look mainly at low, moderate or high-risk investment?

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Answered: Bob Smith is saving for the down…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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Bob Smith is saving for the down payment on a new car. If he is very careful with his money, he will have the full down payment in six months. Because his time frame is short, he is deciding between a low-risk saving option and a moderate-risk investment account. What would you recommend for Bob in these circumstances and why?
Jinhee Lee just graduated from college and began her first job. She has always wanted to buy a condo and believes that she could save enough for the down payment in three to five years. Would you recommend Jinhee place her money in a low- or moderate-risk investment vehicle? Why do you recommend this choice?
Juanita Romero is 16 and has earned some extra money at her summer job. She decides to invest it and let it grow until retirement. She has 49 years until retirement and realizes she can accept some risk. She’s deciding between an investment that has moderate risk and one that has a slightly higher risk and the possibility of a higher return. What would you recommend Juanita choose and why?
Reamon and Keesha Wilson have 2-month-old baby girl and they are already planning for her college costs. The deposits a small amount into a savings account but are looking for several different investment option. Do you recommend that the Wilson’s look mainly at low, moderate or high-risk investment?

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