UNDERSTANDING BUSINESS ACCESS CARD
UNDERSTANDING BUSINESS ACCESS CARD
11th Edition
ISBN: 9781259784835
Author: Nickels
Publisher: MCG CUSTOM
Question
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Chapter 19, Problem 1CT
Summary Introduction

To think critically about: In what proportion should an individual should invest if there are two situations and the person has $50,000 with him.

Introduction:

Investing is an activity of putting money into financial schemes, property, stocks, or a property with the expectation of achieving a return on it.

Expert Solution & Answer
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Explanation of Solution

Given information:

An individual is having $50,000 and has two financial goals that are his wedding planned in two years and savings for retirement, in which he invests.

Explanation:

An individual must consult an advisory firm, or should do a good investment research on his own with the help of articles, newspapers and other sources. After gathering of information, the most suited investment option should be choose and proportionately it should be invested for both the upcoming situations.

As expenses of wedding are too much, so a large proportionate of money should be invested for the purpose of wedding in stocks as it yields a higher rate of return, and rest of the amount should be kept in a saving account which will also earn some interest on the deposited amount.

Conclusion

Thus, individual must invest the amount in stocks and mutual funds proportionately, so that it earns returns and interest in 2 years.

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