QUESTION 1

Your friend Jethro informs you that his uncle has surprisingly bequeathed to him $600,000 under the provisions of his will. He informs you that his initial thoughts are to apply this sum to maximize his retirement income.

Jethro is 35 years old and is employed as an administrator at a university. He is not married and is not presently in a relationship. He owns his own house, which was left to him by his father under the terms of his will. Jethro intends to retire at age 65.

REQUIRED:

In Jethros situation, discuss the investment options which may be considered to achieve his goal of maximizing his retirement income. What do you consider to be the two most appropriate options, and provide an explanation for your conclusions?