Personal Finance
Personal Finance
7th Edition
ISBN: 9780134989969
Author: Madura, Jeff
Publisher: Pearson,
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Chapter 14, Problem 1RQ
Summary Introduction

To determine: The first priority of investing of person A and the disadvantage of investments that satisfy that priority.

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Explanation of Solution

Person A's first investment goal should be to ensure adequate liquidity. Through depositing funds in financial institutions or investing in money market bonds, stability can be achieved. Nevertheless, as these types of investments focus primarily on providing liquidity, they are currently offering very low returns.

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