Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help with the question below please, ill leave a thumbs up. table is provided in the 2nd picture. CASE 2 Victor and Maria Invest for

help with the question below please, ill leave a thumbs up. table is provided in the 2nd picture.
image text in transcribed
image text in transcribed
CASE 2 Victor and Maria Invest for Retirement Victor and Maria Hernandez plan to retire in less than 15 years. Their current investment portfolio is distrib- uted as follows: 40 percent in growth mutual funds, 40 percent in corporate bonds and bond mutual funds, and 20 percent in cash equivalents. They have decided to increase the amount of risk in their portfolio by taking 10 percent from their cash equivalent investments and investing in some mutual funds with strong DO IT IN CLASS growth possibilities. (a) Of the stock mutual funds listed in Table 15-2 on page 476, which two would you recommend to meet the Hernandezes' goals? Why? (b) Would you recommend that the Hernandezes remain invested in those two funds during their retirement years? Why or why not? Page 476 000 20 Largest Stock Mutual Funds Ranked by Size Assets Total Return Maximum Toll-free in Sales number Rank/Name Symbol Billions 1 year 3 years 5 years Charge (800+) 1. Vanguard Total Stock Market Idx Inv VTSMX $300 10% 8% 9% None 635-1511 2. Vanguard 500 Index Inv VFINX 180 10 8 9 None 635-1511 3. American Growth Fund of America A AGTHX 140 10 11 8 5.75% 421-0180 4. American EuroPacific Growth A AEPGX 120 9 7 11 5.75 421-0180 5. Fidelity Contrafund FCNTX 130 10 12 13 None 544-9797 6. Vanguard Total Intl Stock Idx Inv VGTSX 110 9 13 -1 None 635-1511 7. American Capital Income Builder A CAIBX 90 8 9 8 5.75 421-0180 8. American Inc Fund of America A AMECX 90 8 9 5.75 421-0180 9. Franklin Income A FKINX 80 8 11 4.25 632-2301 10. American Capital World Gro & Inc A CWGIX 90 9 10 9 5.75 421-0180 11. Vanguard Wellington WWELX 80 9 8 12 None 635-1511 12. American Balanced A ABALX 70 10 8 13 5.75 421-0180 13. Fidelity Spartan 500 Index Inv FUSEX 70 10 8 9 None 544-9797 14. American Washington Mutual A AWSHX 70 9 8 9 5.75 421-0180 15. American Invstmt Co of America A AIVSX 70 8 11 7 421-0180 16. American Fundamental Inv A ANCFX 60 8 10 8 5.75 421-0180 17. Vanguard Emerging Mkts Stock Idx VEIEX 60 --2 -1 13 None 635-1511 18. Black Rock Global Allocation A MDLOX 60 7 6 7 5.25 441-7762 19. American New Perspective A ANWPX 60 8 10 7 5.75 421-0180 DODGX 50 20. Dodge & Cox Stock 9 10 621-3979 10% 8% S&P 500 Stock Index 9% Source: Data are authors estimates calculated supposedly during an upswing in a sustained but slowly growing bull market of 5 years duration, and nothing in this table constitutes investment advice. Returns are illustrative. OOO OOO OO 0 00 00 00 00 00 00 OWN 00 00 000 5.75 00w 00 00 None

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Financial Institutions Management

Authors: Anthony Saunders

3rd Edition

007303259X, 978-0073032597

More Books

Students also viewed these Finance questions