Focus On Personal Finance 6th International Edition Jack R. Kapoor, Melissa Hart, Les Dlabay, Robert J. Hughes - Solutions

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What expenses may increase or decrease during retirement?
Why do women need to start early to save for retirement?
How did Maureen amass $1.4 million for retirement, while Therese could accumulate only $553,000?
In the past, many workers chose to stay with their employers until retirement. What was the major reason for employees’ loyalty?
Make a list of the criteria you will use in deciding who will be the guardian of your minor children if you and your spouse die at the same time. (LO14.3)
Read this entry on the Money Under 30 website: https://www.moneyunder30.com/do-i-need-a-will.Using this information, prepare a report on the following: (a) Who needs a will? (b) What are the elements of a will (naming a guardian, naming an executor, preparing a will, updating a will, estate taxes,
Prepare a written report of personal information that would be helpful to you and your heirs. Be sure to include the location of family records, your military service file, and other important papers; medical records; bank accounts; charge accounts; location of your safe-deposit box; U.S. savings
Obtain Form SSA-7004 from your local Social Security office. Complete and mail the form to receive a personal earnings and benefits statement. Use the information in this statement to plan your retirement. (LO14.2)
How will your spending patterns change during your retirement years? Compare your spending patterns with those shown in Exhibit 14–3. (LO14.1)
Joe and Rachael are both retired. Married for 55 years, they have amassed an estate worth $4.4 million. The couple has no trust or other type of tax-sheltered assets. If Joe or Rachael died in 2017,
The date of death for a widow was 2017. If the estate was valued at $7.5 million and the estate was taxed at 40 percent, what was the heir’s tax liability? (LO14.4)
What is the total amount of estate removed from Barry and Mary’s estate in 2017? (LO14.4)
How much money can Barry and Mary gift to their grandchildren in 2017 without any gift tax liability?(LO14.4)
How much money can they gift to their children in 2017 without any gift tax liability? (LO14.4)
What are the four major types of taxes to consider in estate planning?
What are the four major types of trusts?
What is the difference between a revocable and an irrevocable trust?
Why should you name a guardian?
What are the responsibilities of an executor?
What are the four basic types of wills?
What is a will?
List some important documents you will need to collect and organize.
What are the two stages in planning your estate?
What is estate planning?
What might you do if your expenses during retirement are higher than you expected?
What is the major difference between a regular IRA and a Roth IRA?
What are the most popular personal retirement plans?
What are the two basic types of employer pension plans?
What are four major sources of retirement income?
Based on your investment goals and the amount available to invest, what types of mutual funds would you consider?
Are there any spending items that you might consider revising to allow you to increase the amount you invest?
Jamie Lee and Ross are ready to evaluate a mutual fund more closely. Choose a specific mutual fund that has been mentioned in Chapter 13 or one that has been recommended by a friend or family member, and complete Your Personal Financial Plan sheet 41. Based on this information, would you recommend
The financial planner recommended looking into managed funds, which could help remove the burden of decision making about when to buy and sell for Jamie Lee and Ross. But Ross was considering index funds, which have a lower management expense ratio. Using your text as a guide, compare managed funds
Jamie Lee and Ross have been reading quite a lot about stock funds while researching the classifications of mutual funds. At Jamie Lee and Ross’s stage in life, what different types of stock funds would you recommend for them to invest their $50,000 inheritance in? Why?
It has been suggested by Jamie Lee and Ross’s professional financial planner that they perform a financial checkup as the first step in investing in mutual funds, even though they are investing $50,000 that was inherited from Ross’s late uncle’s estate. Is it a good time to invest the
Assuming you purchased shares in the Oppenheimer Main Street Midcap Fund A on July 25, 2015, and based on your answer to question 3, how would you decide if you want to hold or sell your shares?Explain your answer.
On July 15, 2015, shares in the Oppenheimer Main Street Midcap Fund A were selling for $30.15 per share. Using the internet or a newspaper, determine the current price for a share of this fund. Based on this information, would your investment have been profitable? (Hint: The symbol for this fund is
What other investment information would you need to evaluate this fund? Where would you obtain this information?
Based on the research provided by Value Line, would you buy shares in the Oppenheimer Main Street Midcap Fund A? Justify your answer.
Briefly describe the prospects for this company. (Include significant factors such as product development, plans for expansion, plans for mergers, etc.)
What types of products or services does this firm provide?
Where is the stock traded (NYSE or Nasdaq)?
What information about the corporation is available on the internet?
Have you read the latest annual report and quarterly report? Yes No
What are the corporation’s website address and telephone number?
What is the corporation’s name?
Based on your observations of our society and the economy, what types of stocks might you consider for investing at this point in your life or in the near future?
What information from your daily spending records could help you achieve your financial goals?
Suppose Jamie Lee and Ross are evaluating corporate stocks to add to their investment portfolio.Using Your Personal Financial Plan sheet 38, select a company from your own personal experiences, such as an automobile or technology company, and research the information needed to complete the
Currently, the economy is in the recovery stage. Referring to Exhibit 12–3, what types of stock would you suggest for Jamie and Ross to invest in considering their life stage and current moderate investment strategies? What characteristics are associated with the types of investments you
Jamie Lee’s father suggested that they purchase stock in a company that he has held shares in for decades. They want to take advantage of the stock tip, but Jamie Lee and Ross are trying to decide between purchasing the company’s common stock and preferred stock. How would you describe the
What are the advantages and disadvantages of investing in a technology company’s IPO? Will they be guaranteed a large return from this investment? At this life stage, would you recommend that Jamie Lee and Ross invest in an IPO? Why or why not?
Today, you can practice your investing skills by playing a virtual stock game. To complete this activity, use an internet search engine such as Google or Yahoo! Begin by entering virtual stock game in the search box. Select one of the virtual stock games, and then play the game for a specific time
Prepare a chart that describes the similarities and differences among the long-term and short-term investment strategies described in this chapter.
Interview an account executive or financial planner to determine if this individual could help you obtain your investment objectives. To complete this activity, it’s important to be prepared. So begin by listing five to seven questions that could help you choose the right person to help create
In your own words, describe how an investment in common stock could help you obtain your investment goals.
Talk with different people and ask them if they include common or preferred stocks in their investment program. Also, ask them if they feel stocks could help you achieve your investment goals.
After researching Valero Energy common stock, Sandra Pearson is convinced the stock is overpriced.She contacts her account executive and arranges to sell short 250 shares of Valero Energy. At the time of the sale, a share of common stock had a value of $65. Three months later, Valero Energy is
Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications. At the time of his investment, Verizon was selling for $47 a share. (LO12.5)a. If Bob paid a commission of $30, how many shares could he buy if he used only his own money and did not use margin?b. If Bob
For four years, Marty Campbell invested $4,000 each year in Harley-Davidson. The stock was selling for $74 in 2014, $62 in 2015, $51 in 2016, and $59 in 2017. (LO12.5)a. What is Marty’s total investment in Harley-Davidson?b. After four years, how many shares does Marty own?c. What is the average
Casper Energy Exploration reports that the corporation’s assets are valued at $185,000,000, its liabilities are $80,000,000, and it has issued 6,000,000 shares of stock. What is the book value for a share of Casper stock? (LO12.3)
Ford Motor Company has a beta of 1.36. If the overall stock market increases by 6 percent, based on this information, how much should investors assume that Ford will increase? (LO12.3)
Currently, Boeing pays an annual dividend of $5.68. If the stock is selling for $180, what is the dividend yield? (LO12.3)
Analysts that follow JPMorgan Chase, one of the nation’s largest providers of financial services, estimate that the corporation’s earnings per share will increase from $6.69 in the current year to $7.64 next year. (LO12.3)a. What is the amount of the increase?b. What effect, if any, should this
Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $9,700,000 and has issued 7,000,000 shares of common stock. The stock is currently selling for $32 a share. (LO12.3)a. Calculate the earnings per share
In September, the board of directors of Chaparral Steel approved a stock split of 2-for-1. After the split, how many shares of Chaparral Steel stock will an investor have if he or she owned 230 shares before the split? (LO12.1)
Wanda Sotheby purchased 120 shares of Home Depot stock at $148 a share. One year later, she sold the stock for $140 a share. She paid her broker a commission of $34 when she purchased the stock and a commission of $39 when she sold it. During the 12 months she owned the stock, she received$427 in
Sarah and James Hernandez purchased 140 shares of Macy’s stock at $31 a share. One year later, they sold the stock for $35 a share. They paid a broker a commission of $8 when they purchased the stock and a commission of $12 when they sold the stock. During the 12-month period the couple owned the
Jim Johansen noticed that a corporation he is considering investing in is about to pay a quarterly dividend. The record date is Thursday, April 20, 2017. In order for Jim to receive this quarterly dividend, what is the last date that he could purchase stock in this corporation and receive this
During the four quarters for 2017, the Browns received two quarterly dividend payments of $0.18, one quarterly payment of $0.20, and one quarterly payment of $0.22. If they owned 270 shares of stock, what was their total dividend income for 2017? (LO12.1)
Jamie and Peter Dawson own 220 shares of Duke Energy common stock. Duke Energy’s quarterly dividend is $0.86 per share. What is the amount of the dividend check the Dawson couple will receive for this quarter? (LO12.1)
Describe each of the following investment techniques:a. Buy and hold.b. Dollar cost averaging.c. Direct investment.d. Dividend reinvestment.e. Margin.f. Selling short.g. Options.
In your own words, describe the difference between an investor and a speculator.
Explain the important characteristics of each of the following types of stock transaction orders:a. Market order.b. Limit order.c. Stop-loss order.
Assume you want to purchase stock. Would you use a full-service broker or a discount broker?Would you ever trade stocks online?
What is the difference between the primary market and the secondary market? What is an initial public offering (IPO)?
Write the formula for the following stock calculations, and then describe how this formula could help you make a decision to buy or sell a stock.
Explain the relationship between corporate earnings and a stock’s market value.
Using Exhibit 12–5, pick three financial measures and describe how they could help you evaluate a corporate stock.
What is the difference between a prospectus and an annual report?
Describe how each of the following sources of investment information could help you evaluate a stock investment.Source of Information Type of Information How Could This Help The internet Stock advisory services A newspaper Government publications Business periodicals
From an investor’s viewpoint, what is the difference between common stock and preferred stock?
Why do corporations split their stock? Is a stock split good or bad for investors?
Why do corporations sell stock? Why do investors purchase stock?
Based on your Daily Spending Diary, describe actions that you might take to identify and achieve various financial and investment goals.
Explain how the use of a Daily Spending Diary could result in starting an investment program.
Using the investment goal guidelines, assess the validity of Jamie Lee and Ross’s short- and long-term financial goals and objectives (college education for the kids; retirement; and a second home).
After reviewing Jamie Lee and Ross’s current financial situation, suggest specific and measurable short-term and long-term financial goals that can be implemented at this stage.
Describe the stage in the adult life cycle (Chapter 1, Exhibit 1–1) that Jamie Lee and Ross are experiencing right now. What are some of the financial activities that they should be participating in at this stage?
Based on your research, which investment would you recommend to Mary Goldberg? Why?
Using the information obtained in the library or on the internet, answer the following questions about Peter Manning’s investment suggestions.a. What does the rating for the Dollar General bond mean?b. What is the current yield for a Dollar General bond?c. What does the rating for the Berkshire
According to Mary Goldberg, the chance to invest in New World Explorations was “too good to pass up,” and she lost $10,000. Why do you think so many people are taken in by get-rich-quick schemes?
What is the current yield for a $1,000 bond that pays 4.25 percent interest and has a current price of $920?
Explain what the following bond ratings mean for investors:a. Aaab. BBBc. CC
Calculate the current price for the following bonds:Face Value Bond Quotation Current Price$1,000 103$1,000 77.5
What type of information about bonds is available on the internet?page 373
List the three reasons investors purchase corporate bonds.
In your own words, describe why corporations issue corporate bonds.
Calculate the annual interest and the semiannual interest payment for corporate bond issues with a face value of $1,000.
Using the formula presented in this section, calculate the taxable equivalent yield for a tax-free bond that pays 3.5 percent for a taxpayer in a 33 percent tax bracket.

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Focus On Personal Finance 6th International Edition Jack R. Kapoor, Melissa Hart, Les Dlabay, Robert J. Hughes - Solutions

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