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Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Transcribed Image Text:Dua is the chief executive officer of a large manufacturing firm in Brampton. She has significant assets and earns approximately $350,000 per year. Her financial advisor has suggested that she try to diversify her investments as most of her investments are in preferred stocks, money market funds and dividend-paying stocks. Her advisor has suggested that she look at investing a small portion of her portfolio, $250,000, in medium-risk investments, such as real estate. Her advisor has referred her to Nigel, a mortgage agent level 2, Nigel uses Form 3 as his know your client form, and after completing this form and discussing her investment objectives, Nigel has determined that she belongs to a designated class of investors, and therefore does not require the investor/lender disclosure documents when he presents an investment option to her. Nigel has several mortgages that he can refer to Dua, including some that may not fit her risk profile. One deal for a high-risk commercial project has been giving Nigel some trouble. In fact, Nigel can't find an investor to lend on this deal. Since he feels that Dua will take his advice without question, and since she doesn't require a Form 1. Nigel is considering offering this deal to her. He feels that it is an excellent investment for the right investor, and he is set to make a 5% fee, which he desperately needs. Given this scenario, what should Nigel do?

Transcribed Image Text:Select one: a. Present Dua with the deal and supporting documents, including Form 1 and Form 1.1 and hopes she decides to invest b. Find another investment for Dua that may be better suited to her investment profile c. Present Dua with the deal and supporting documents without Form 1 and Form 1.1 d. Present Dua with the deal and advise her to obtain independent legal advice

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