Business Finance Homework Help

Create an investment portfolio for each of the following three families assuming there is $400,000 to invest for each family. (Treat each case separate from the other). Unless otherwise noted, assume that wage income is sufficient to fund day-to-day expenses. Explain your rationale for each investment program. Your rationale should include a one-page assessment about risk factors, present and future financial needs and most likely objectives, for each of these families.

Your investment program should not only include an asset allocation model (percentages in stocks, bonds, cash, alternatives, etc.) but you should provide specific fulfillment for each of the asset classes you identify (that is, if you choose stocks – which ones? If you choose equity mutual funds, which ones and how much should be allocated to each fund?). Explain your thinking in the selection of the particular assets.

Present your asset allocation for each case in tabular format, segregated by asset class, listing the security, dollar amount allocated, relative percentage of the portfolio and expected yield (cash return) in dollars and %.

Married couple (H&W) in their 30s, 3 kids (ages 10, 6 and 2), own a $200,000 house with a 30 year mortgage (28 years remaining on mortgage; initial borrowing was $175,000) and 2 cars, both work and earn $125,000 annually (H earns $50,000 and W earns $75,000);

2016 graduate of RIT, no more student debt, single, no kids, rents a downtown apartment, $65,000 annual salary;

Retired couple, both 67, social security and pension are primary sources of cashflow. They need an additional $35,000 in annual cashflow from their investments in order to maintain a suitable lifestyle and they are not willing to work (not even part-time). For planning purposes, they expect to live another 20 years