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Saving and Investing
Final Assignment

Choose one of the following investment case studies involving determining financial goals and translating these into suggestions for action. Cases include buying a new car or home, college planning, and retirement planning. What would you tell these people?

1. Jack and Diane are a young married couple looking to start a family in the next few years and to buy a house in the next five years. They estimate they will need to have accumulated $15,000 for a down payment at that time.

a. Assuming that they would be able budget properly for this, what type of investment vehicles might be appropriate?
b. What type of institution might they visit for more information?

2. Mike and Carol, now in their mid thirties, have about thirty years until they retire. They have realized that they need to save for retirement but are not sure how to begin. They are both employed and know their employers offer 401(k) plans. They have a lot of choices and do not know what they all mean.

a. Who might be able to help them with information?
b. What things should they consider?
c. With thirty years until retirement, what type of investment vehicles should they choose?

3. Archie and Edith are both in their late mid-fifties. They have invested for the last 15 years in a portfolio heavily weighted in stocks. They plan to retire around age 62.

a. Given the proximity to retirement, what adjustments might Archie and Edith want to make to their portfolio?
b. Why?

4. Bill and Hillary are a moderately wealthy family that is in the 31% marginal tax bracket. They know that they would like to include some bonds in their portfolio for diversification. They have narrowed their choice between a corporate bond from IBM yielding 6.35% and a City of Madison municipal bond yielding 5.3%.

a. Which one should they pick?
b. Why?

Type your answer to the chosen case study in the box and click the submit button

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