Assume the role of an investor; Choose one (or more) investments that investor would likely make from...

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Finance

Assume the role of an investor;
Choose one (or more) investments that investor would likelymake from the following choices: common stock, preferred stock,and/or bonds; and
Answer the follow-on questions.
First, choose one of the following profiles:

Investor A
25-year-old, first-time investor with $5,000 to invest. Longterm investment goals.

Investor B
50-year-old with $200,000 in savings. Looking to diversifyinvestment portfolio and reduce risk as retirementapproaches.

Investor C
Retired 65-year-old with $1.2M in savings. Looking for steady,fixed income investments.

Then, answer these follow-on questions based on yourchoices:

Describe one valuation method for each investment choice youmade
Describe the impact that interest rates have on yourinvestment choices

Answer & Explanation Solved by verified expert

4.0 Ratings (646 Votes)

Investor A Since the investor is young and has funds to invest he should invests in equities As investments in equities is risky and in this age bracket the investor is capable of taking risks and has a higher risk appetite Due to the investor having long term investment goals equities can help in wealth creation Investor B Investor B can invest in preferred stocks and bonds As preferred See Answer

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Assume the role of an investor;Choose one (or more) investments that investor would likelymake from the following choices: common stock, preferred stock,and/or bonds; andAnswer the follow-on questions.First, choose one of the following profiles:Investor A25-year-old, first-time investor with $5,000 to invest. Longterm investment goals.Investor B50-year-old with $200,000 in savings. Looking to diversifyinvestment portfolio and reduce risk as retirementapproaches.Investor CRetired 65-year-old with $1.2M in savings. Looking for steady,fixed income investments.Then, answer these follow-on questions based on yourchoices:Describe one valuation method for each investment choice youmadeDescribe the impact that interest rates have on yourinvestment choices