Management of personal finances

Assignment Help Finance Basics

Reference no: EM1345303

You've been asked by elderly relative to take over the management of her finances. She is in reasonably good health, and currently lives in a "life-care" facility that offers a wide range of living arrangements, from independent, assisted living and custodial care. She has total funds of $1.1 million that provide the primary source of her income, about $50,000 yearly. Social Security income is about $10,000 a year. She has invested her funds in the past in money-market funds and / or CDs (certificates of deposit) because she's wary of stocks. However, her recent concern is that the money earned from her funds and Social Security won't be sufficient to meet the rising cost of her living arrangements, now about $30,000 yearly but increasing about 10% yearly. She has asked you to use your best judgment to develop a viable strategy that could reasonably sustain her current living situation for the next ten or more years. Provide her with a viable strategy (identify major asset types only); include your best assessment of estimated rates of return, annual income generated and possible risks.

Reference no: EM1345303

Questions Cloud

How far the fulcrum should an effort of 200 n be applied : A 400 kg car sits 2 m to the right of a fulcrum assume car is on a weightless rod, how far to the left of the fulcrum should an effort of 200 N be applied to keep the system in quilibrium.

Interest expense and discount amortization : Spencer corporation sells 10 percent bonds having a maturity value of 3,000,000 fo 2,783,724. The bonds are dated Jan 1, 2012 and mature Jan 1, 2017. Interest is payable yearly on Jan 1.

Accounting and finance for profit and non profit firm : I am looking employment in accounting & finance with a for profit firm or non profit organization.

How long age was an artifact made : An air molecule is moving at a velocity of 444 m/s. How various meters would the molecule move during 7.00 ms (milliseconds) if it didn't collide with any other molecules.

Management of personal finances : You've been asked by elderly relative to take over the management of her finances. She is in reasonably good health, and currently lives in a "life-care" facility that offers a wide range of living arrangements, from independent, assisted living a..

Calculate the standard deviation of portfolio : You are considering forming a portfolio with two securities, the details of which are as follows:

Currency swap and spot exchange rate : ABC Corp. entered in a currency swap with its bank, providing that ABC borrows $5 million at 10% and swaps for a 12% yen loan.

Traditional financial and derivative financial instruments : Illustrate out the term underlying as it relates to derivative financial instruments? Write down the main distinctions between a traditional financial instrument and a derivative financial instrument?

Prepare journal entries to record the transaction : Abernathy Company was organized on Jan 1, 2012. It is authorized to issue 10,000 shares of 8 percent, $50 par value preferred stock, & 500,000 shares of no-par common stock with a stated value of $2/share.

User Account

All Pages