Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A family will retire in a few years. They have a high tax bracket and are concerned about their after-tax rate of return. A meeting

A family will retire in a few years. They have a high tax bracket and are concerned about their after-tax rate of return. A meeting with their financial planner reveals that they are primarily focused on safety of principal and will need a 6% to 8% average rate of return on their portfolio. They desire a diversified portfolio, and liquidity is likely to be a concern due to health reasons. Which of the following asset allocations seems to best fit this family's situation?

10% money market; 50% intermediate-term bonds; 40% blue chip stocks, many with high dividend yields

0% money market; 60% intermediate-term bonds; 40% stock

5% money market; 35% intermediate-term bonds; 60% stocks, most with low dividends

10% money market; 30% intermediate-term bonds; 60% high-dividend-paying stocks

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions