3. Ms. Jones is about to inherit $200,000 and has decided to invest the entire amount and save it for retirement. She is 46 year old and plans to retire at age 65. Her investment advisor has recommended three different mutual fund portfolio options to consider with the following rates of return High Risk Portfolio - Projected annual return 13.5% Moderate Risk Portfolio - Projected annual return - 7.5% Low Risk Portfolio - Projected annual return - 3.5% a. Calculate the FV for all three investment options. Assume annual compounding b. She wants to compare the present values of each option to the current amount of her inheritance. Assuming an annual inflation rate of 4% as the appropriate discount rate, what are the PVs for all three options C. Ms. Jones tends to be risk adverse and avoid investments that have potential risk of capital loss. However, at age 46, this investment will be her only retirement asset and needs to make the most of this investment. When considering these subjective variables, what investment portfolio would you recommend given her desire to be risk adverse, while maximizing value to fund her retirement? d. Would you consider a diversified approach and if so, what type of mix and how might the FV and PV change? Please explain and show work (Note: This will be counted as extra credit but I do want you to explore this question, play with the numbers and try to come up with a solution. 3. Ms. Jones is about to inherit $200,000 and has decided to invest the entire amount and save it for retirement. She is 46 year old and plans to retire at age 65. Her investment advisor has recommended three different mutual fund portfolio options to consider with the following rates of return High Risk Portfolio - Projected annual return 13.5% Moderate Risk Portfolio - Projected annual return - 7.5% Low Risk Portfolio - Projected annual return - 3.5% a. Calculate the FV for all three investment options. Assume annual compounding b. She wants to compare the present values of each option to the current amount of her inheritance. Assuming an annual inflation rate of 4% as the appropriate discount rate, what are the PVs for all three options C. Ms. Jones tends to be risk adverse and avoid investments that have potential risk of capital loss. However, at age 46, this investment will be her only retirement asset and needs to make the most of this investment. When considering these subjective variables, what investment portfolio would you recommend given her desire to be risk adverse, while maximizing value to fund her retirement? d. Would you consider a diversified approach and if so, what type of mix and how might the FV and PV change? Please explain and show work (Note: This will be counted as extra credit but I do want you to explore this question, play with the numbers and try to come up with a solution