1. What is the benefit to Jamie Lee and Ross investing in a 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?

2. 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. What are the advantages to each type of stock?

3. 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 suggested?

INVESTING IN STOCKS 

The triplets are now entering high school and Jamie Lee and Ross are comfortable with their financial and investment strategies. They budgeted throughout the years and are on track to reach their long-term investment goals of paying the triplets' college tuition and accumulating enough to purchase a beach house to enjoy when Jamie and Ross retire.

Recently, Ross inherited S50,000 from his uncle's estate. Ross would like to invest in stocks to supplement their retirement income goals.

Jamie Lee and Ross have been watching a technology company that has an upcoming initial public offering and several other stocks for well-established companies, but they are unsure which stocks to invest in and are also wondering if their choices will fit their moderate risk investment strategies. They want to make the best decisions they can to maximize chances they will benefit from positive investment returns.