Investment Information

$$ They believe a $$60,000$ emergency fund is adequate.

$$ They consider themselves moderate risk takers.

$$ Peter$$s individual retirement account $($IRA$)$ investment portfolio is $$600,000$ of

which $$300,000$ is invested in low$-$to$-$medium$-$risk equity mutual funds. Patricia

is the beneficiary of the IRA and Peter$$s children are named as contingent ben$-$

eficiaries.

$$ The other $$300,000$ of the IRA is invested in staggered maturity, short$-$term

Treasury notes.

$$ Peter expects to use the income and some of the principal from the $$300,000$ in

Treasury notes in his IRA to make up any shortfall between his retirement needs

and his defined benefit plan annuity, for the period of time until Social Security

benefits are received.

$$ Peter is currently earning an annual rate of return of $4\mathrm{.}5\%$ on the $$300,000$

invested in Treasury notes.

With what risks should Patricia be concerned regarding her investment portfolio?

with calculation