Question
Hello, I was hoping someone could give me an example of how this should be filled out and explain the answers for each question. Assume
Hello, I was hoping someone could give me an example of how this should be filled out and explain the answers for each question.
Assume you have $50,000 to invest for a real or hypothetical intermediate-term or long-term financial goal (that is, more than two years in the future) of your choice. This goal can be anything you want: retirement, a world cruise, a down payment for a house, a fancy car, college tuition, etc. However, you should choose a specific goal and have it in mind as you complete the exercise.
1. Financial goal: What was the financial goal you chose for this exercise?
Wedding, 2 years. ~$27,000
2. Vanguard recommendation: What was the Vanguard website's suggested asset allocation percentages for your investment in each of the the following categories?
A. Short-term reserves (for example, cash in a savings account) B. Bonds 50% C. Stocks 50%
3. Capital and asset allocation (how much of the total will be saved as cash and how much will be invested in different assets)
A. How much of your $50,000 investment will you put into savings/riskless investments (for example, cash in a savings account)?
B. How much of your investment will you put into stocks?
C. How much of your investment will you put into bonds?
D. How much of your investment will you put into into other asset categories (commodities, real estate, or collectibles)?
E. Does your decision in 3A-D represent more, less, or the same risk as the Vanguard recommendation?
F. If you chose to invest differently than the Vanguard recommendation, please briefly explain your reasoning for that choice.
Note: The amounts you allocate among savings/riskless investments, stocks, bonds, and other investments must total to $50,000.
4. Security selection:
A. There are two basic strategies for security selections: active management and passive management. Explain the difference between these two in enough detail so that someone who is unfamiliar with these terms can distinguish between them.
B. Will you use active management or passive management in your own investment?
C. Why do you think this approach is best for you? Provide at least one specific advantage of the approach you choose.
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