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Personal Finance: Investing Scenario:
Bernardo: He loves his savings account. Why? Because it is the only thing protected by the FDIC. He said this is the riskless option for his entire retirement. No market risks! Just safe money. His bank approached him about some CD options that he has started to use. However, he doesn't know if it is as safe as his savings account which has the FDIC protection.
Answer requirements:
Consider what you have learned about the transaction accounts, bonds and stocks. For each scenario, please answer the following questions:
1. Discuss the appropriateness of the investment sections. Incorporate what we discussed in Unit 1 regarding the risk and return trade off, current interest rates and inflation levels (compared to historical levels) into your answer. Please use references and correctly cite your work.
2. From what we learned in Unit 2, list at least one advantage of his/her chosen course of action.
3. From what we learned in Unit 2, list at least one disadvantage of his/her chosen course of action
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