The Smith have three children, one of which is going to college in 10 years. They want to provide for their child so they will need a college fund set up. This college fund needs to be able to generate $35,000 a year for four years, in ten years. The Lovelaces can save $50,000 a year after they satisfy their living needs. They also have $500,000 in investments that we can work with. They are taxed at 30%. They plan to own their restaurant into their 70s, so retirement age will be later than the normal age. This gives them 10 years to save for their daughters education, and 30 years to save for retirement.

Prepare an Asset Allocation for the Smith family

* List and Discuss Asset Class and expected total return and standard deviation

* Propose Acceptable Range of Each Asset Class And Calculate Expected Total Return

*All terminal after-tax CFs properly identified with brief explanation