Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jiang 401(k) Case Study Your best friend, Jiang, Is now 27-years old and has worked for the same accounting firm since he graduated from Baruch

image text in transcribed
image text in transcribed
Jiang 401(k) Case Study Your best friend, Jiang, Is now 27-years old and has worked for the same accounting firm since he graduated from Baruch College five years ago. His current income is good - but not great. He has just started an MBA program at night and plans to eventually take the CPA exam. His boss has told him he can expect a considerable bump in his compensation after he completes his MBA and passes his CPA exam. Jiang has chosen a traditional 401(k) plan which allows him to defer pre-tax money with each paycheck into his investment account. He could have a Roth 401(k) Instead, but he figured it made sense to get the tax break now rather than later. His plan allows him to buy any individual stock or mutual fund. Based upon his own intuition and some suggestions from his dad's broker he has put together the following portfolio: 200 Fidelity Advisor high Income Advantage, M Shares 100 Rydex S&P 500 Index Fund, C Shares 200 Invesco S&P 500 Index Fund, C Shares 5 Alphabet Class A Shares 15 Apple! 100 Microsoft 200 Oracle How much is this portfolio worth? (USE PRICES AS OF CLOSE OF FRIDAY, OCTOBER 1, 2021) 200 Oracle How much is this portfolio worth? (USE PRICES AS OF CLOSE OF FRIDAY, OCTOBER 1, 2021) Based upon what you have learned in class, what is wrong with this portfolio? Is a "traditional" 401(K) the best choice for Jiang? Jiang knows that you are pretty smart when it comes to investing and has asked for your recommendations. Based upon what you have been taught in this class why would you recommend either target-date or target-risk funds - or the asset-class ETFs in the mini-project? Be specific as regards how much you would invest in various Investments. Explain to Jiang why these are great Investments. Be PERSUASIVE. You need to "sell your ideas to Jiang

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

Practical financial management

Authors: William r. Lasher

5th Edition

0324422636, 978-0324422634

More Books

Students also viewed these Accounting questions

Question

=+d) Perform the ANOVA and report your conclusions.

Answered: 1 week ago