Lucia Gomez, a flight attendant from Kent, Ohio, is thinking about jump-starting her retirement savings plan by investing the $45,000 gift that her elderly uncle gave her. She also wants to invest $3,000 a year for the next 24 years for retirement. Lucia knows little about investments and does not seem to have a big desire to learn. a. What can you suggest to Lucia about figuring out her investment philosophy? (Hint: Mention the information in Figure 13-2 in your response.) The input in the box below will not be graded, but may be reviewed and considered by your instructor. b. Would you recommend active or passive investing for her, and why? The input in the box below will not be graded, but may be reviewed and considered by your instructor. c. Should Lucia be a lender or owner? The input in the box below O HI O will not be graded, but may be reviewed and considered by your instructor, C 75F Clear D 1:0 7/5 d. Identify three risks to her retirement investments that Lucia should try to avoid, and explain how she can avoid them. The input in the box below will not be graded, but may be reviewed and considered by your instructor. e. Select two of the four recommended investment strategies to recommend to Lucia, and explain why she should follow them. The input in the box below will not be graded, but may be reviewed and considered by your instructor. f. If Lucia's $45,000 is invested in a standard investment account and her $3,000 yearly is invested in a tax-sheltered account, with each account growing at 8 percent annually for 24 years, how much money will she have accumulated in each account? She is in 25 percent tax bracket. (Hint: Adjust the lump-sum investment for 25 percent taxes. Use Appendix A-1, Appendix A-3.) Round your answers to the nearest dollar. Round Future Value of a Series of Equal Amounts and Future Value of a Single Amount in intermediate calculations to four decimal places. Standard investment account: $ Tax-sheltered account: $ Check My Work (2 remaining) Lucia Gomez, a flight attendant from Kent, Ohio, is thinking about jump-starting her retirement savings plan by investing the $45,000 gift that her elderly uncle gave her. She also wants to invest $3,000 a year for the next 24 years for retirement. Lucia knows little about investments and does not seem to have a big desire to learn. a. What can you suggest to Lucia about figuring out her investment philosophy? (Hint: Mention the information in Figure 13-2 in your response.) The input in the box below will not be graded, but may be reviewed and considered by your instructor. b. Would you recommend active or passive investing for her, and why? The input in the box below will not be graded, but may be reviewed and considered by your instructor. c. Should Lucia be a lender or owner? The input in the box below O HI O will not be graded, but may be reviewed and considered by your instructor, C 75F Clear D 1:0 7/5 d. Identify three risks to her retirement investments that Lucia should try to avoid, and explain how she can avoid them. The input in the box below will not be graded, but may be reviewed and considered by your instructor. e. Select two of the four recommended investment strategies to recommend to Lucia, and explain why she should follow them. The input in the box below will not be graded, but may be reviewed and considered by your instructor. f. If Lucia's $45,000 is invested in a standard investment account and her $3,000 yearly is invested in a tax-sheltered account, with each account growing at 8 percent annually for 24 years, how much money will she have accumulated in each account? She is in 25 percent tax bracket. (Hint: Adjust the lump-sum investment for 25 percent taxes. Use Appendix A-1, Appendix A-3.) Round your answers to the nearest dollar. Round Future Value of a Series of Equal Amounts and Future Value of a Single Amount in intermediate calculations to four decimal places. Standard investment account: $ Tax-sheltered account: $ Check My Work (2 remaining)
