PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 1FPE
Adapting to a low-interest-rate environment. A retired couple has expressed concern about the really low interest rates they’re earning on their savings. They’ve been approached by an adviser who says he has a “sure-fire” way to get them higher returns. What would you tell this retired couple about a low-interest-rate environment, and how would you recommend them to view the adviser’s new prospective investments?
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If we realize that our retirement plan will not be able to provide the desired income during our retirement period, we should make some corrections. From the measures listed below, choose the one that WILL NOT help us to achieve our financial goals during our retirement period. *
Reduce our required income in retirement.
Increasing the contributions to our retirement portfolio during our working period (that is, before we retire).
Stop making deposits in our Individual Retirement Account (IRA).
Trying to increase the rate of return of the investments we do to our retirement portfolio before retirment.
Delay our retirement to a later date.
In the context of the different categories of investors, match each sentence to the correct category of investor. *
Conservative
Moderate conservative
Moderate
Moderate aggressive
Aggressive
This investor is looking to invest for the long-term with a specific goal in mind (for example, college savings, retirement, etc.).
Investor who does not want to lose any capital and counts on the investment revenues to pay for day to day living expenses.
This investor is willing to take on more risk to realize higher returns, being able to accept higher downside risk than the market, but expects to be substantially compensated when markets go up.
Similar to Conservative, but this investor wants to participate a little more in market changes although wants maximum protection.
This investor is willing to accept large fluctuations in portfolio returns to produce returns substantially above the market in the long-term, usually having an extremely long-term horizon so that she/he can…
Chapter 4 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
Ch. 4 - Prob. 1LOCh. 4 - Describe todays financial services marketplace,...Ch. 4 - Prob. 3LOCh. 4 - Prob. 4LOCh. 4 - Prob. 5LOCh. 4 - Develop a cash management strategy that...Ch. 4 - Adapting to a low-interest-rate environment. A...Ch. 4 - Prob. 2FPECh. 4 - Choosing a new bank. Youre getting married and...Ch. 4 - Prob. 4FPE
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