Three professors want to invest in retirement funds. They are all eligible for t

Question

Three professors want to invest in retirement funds. They are all eligible for the plans offered by their univeristy. What type of retirement plans (pre-tax/post-tax) should they invest in? What should they look for in a provider? And what is the optimal asset for these individuals? Be detailed in your explaination.

a. Professor A has a specific retirement goal. She plans to retire at 55 and travel the world in comfort.
b. Professor B has saved $10,000 that he would like to invest for his children’s college education in fifteen years.
c. Professor C is a degenerate gambler. He has recently returned from Las Vegas with a suitcase full of cash. However, he is in a pickle because his card counting has now gotten him banned from even the sketchiest off-strip establishments. He wants to try trading financial securities as an alternative way of getting some action.

Explanation / Answer

Investor Type

1.Aggressive Investor

2.Conservative Investor

A. An aggressive investor will have easily taken risk while it is difficult to motivate a conservative investor to take a risk.

B.The return offered should be very huge for a conservative investor to take a given level of riski.e he expects high risk Premium

Professor A

Professor A is not investor , he is only spending money on expendiiture on after retirement.

Professor B

Professor B is conservative investor , saved 10000$ and invest children education for fifteen years. The return offered should to very huge for level of risk.

Professor C

Professor C is aggressive investor because easily taken risk, Cis gambler is more risky and return may or may not be available.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.