A Couple in their early 30s recently inherited $90,000. They have no children an

Question

A Couple in their early 30s recently inherited $90,000. They have no children and both have good jobs. They don't need the money so they decided to invest all of it in stocks, bonds and perhaps money market.

1. What kind of investment approach do you think they should adopt--that is should they be conservative or aggressive?

2. What kind of stocks do you think they should invest in?

3. How important is current income (i.e. dividents and interest income) to them?

4.Should they be putting any of their money into bonds?

5. Construct an investment portfolio that is right for them and their $90,000. Make sure you put stocks, bonds and/or convertible securities in the portfolio. You can also put up to one-third of the money into short-term securities such as CDs, Treasury bills, money funds or MMDA. The portfolio has to contain 6 or more different securities and must use the latest issue of the Wall Street Journal or finance.yahoo.com. Show the amount invested in each security along with the amount of the current income (from dividends and/or interest)that will be generated for the investments.

6. Why did you select those particualar securties?

Explanation / Answer

1.THEY SHOULD ADOPT AN AGGRESSIVE INVESTMENT APPROACH.PEOPLE WHO DONT LIKE LOSING MONEY ARE SAID TO HAVE CONSERVATIVE INVESTMENT APPROACH AND IN THE GIVEN CASE THE COUPLE DOSEN'T NEED THE MONEY SO IS INVESTING IN STOCKS,BONDS ETC.

2.THEY SHOULD INVEST IN BULLISH STOCKS.

3.CURRENT DIVIDENDS AND INTEREST INCOME IS NOT IMPORTANT TO THEM.

4.

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