Question
QUESTION 65 Mark Strong retires early and will have no income other than his portfolio income. He believes he will need $125,000 in before-tax income
QUESTION 65
-
Mark Strong retires early and will have no income other than his portfolio income. He believes he will need $125,000 in before-tax income per year to cover his living expenses. Mark commits to paying $12,000 per year of his mothers living expenses and plans to gift his brother a one-time present of $45,000. Mark has $2 million in investable assets and inflation is expected to be 2.2%. Marks return objective is closest to:
a. 6.3%.
b. 7.0%.
c. 9.2%.
d. 9.8%.
QUESTION 66
-
Lew Toll retires early at age 55 after a long career as a successful chemist. Lew sells several patents he developed for scientific tools and has in excess of $10 million in investable assets. Lews children are independent, and he has few financial obligations. Lew has constructed his current portfolio which is weighted heavily toward fixed-income securities with only 10% in large cap equities. Lew describes himself as highly conservative and suggests to his financial advisor that all of his wealth should be invested in Treasury securities. Lews ability to take risk is most likely:
a. Low.
b. Moderate.
c. Moderate to high.
d. High.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started