Passage

Magnus and Queen Carlsen, Norway residents, are reviewing their financial plan. The Carlsens, both 50 years old, have twins one daughter one son, 18 years old. With their combined after-tax salaries totaling $100,000 a year, they can meet their living expenses and save $20,000 after taxes annually currently. They expect little change in either their incomes or expenses on an inflation-adjusted basis other than the addition of their daughters college expenses. Their long-term financial goal is to provide for themselves and for their kids education plus buying a summer house in California shores. The Carlsens both wish to retire in 10 years. Their daughter Tan Z. Carlsen, a talented musician, is now entering an exclusive four-year college program. This program requires a $50,000 contribution, payable now, to the colleges endowment fund. Thereafter, her tuition and living expenses, to be paid entirely by the Carlsens, are estimated at $40,000 annually. She will fund herself after graduation. The son Fabiano C. Carslen has basic programming skills and will work after high school in a Tech Corp. to support his education and gain experience for yearly $30.000 after tax. His life cost yearly is $10.000. He plans to go to university after his sister graduates 4 years later with 75 % scholarship to a yearly $40,000 school. His university will also be 4 years. His spending will not change during university. He will take care of himself after graduation. The Carlsens personal investments total $610,000, and they plan to continue to manage the portfolio themselves. They prefer conservative growth investments with minimal volatility. One-third of their portfolio is in the stock of Queens employer, a publicly traded technology company with a highly uncertain future. The shares have a very low-cost basis for tax purposes. The Carlsens, currently taxed at 20 percent on net realized investment capital gains. In 10 years, Magnus will receive a distribution from a family trust. His portion is now $1 million and is expected to grow prior to distribution. Magnus receives no income from the trust and has no influence over, or responsibility for, its management. The Carlsens know that these funds will change their financial situation materially but have excluded the trust from their current financial planning.

1. Explain very shortly with your own words the below for Carlsens. Use bullet points and keywords
   1. Return objective
   2. Risk tolerance
   3. Time horizon
   4. Liquidity requirements
   5. Tax concerns