About investing-wants to ask about investing in bonds

Assignment Help Financial Management

Reference no: EM131927825

Miguel, a recent college graduate who heard that you know something about investing, wants to ask about investing in bonds. Miguel indicated that, according to his friends, the stock market was too volatile and bonds were a safer place to invest. Miguel admitted that he really didn’t know much about either stocks or bonds but that he hoped to start saving so that he could purchase a house in the next 5 years. Miguel also mentioned that he had heard about preferred stock and real estate as alternatives to bonds. His roommate recommended that he buy a preferred stock that pays a $4.50 annual dividend or purchase farmland outside his hometown. Answer the following questions in a way that will help Miguel learn investment concepts.

If Miguel thinks that interest rates are going to increase, what type and maturity of bond should he purchase? What type and maturity should he avoid? Why?

Develop a checklist of rules that Miguel should use when purchasing a bond.

If Miguel really wants to purchase real estate to meet his objective, is a direct or indirect real estate investment more appropriate for him? Explain your answer in terms of liquidity, diversification, and safety.

Reference no: EM131927825

Questions Cloud

Review the recent research into malaria vaccine development : Due to the organism having a complex life cycle within its human host and multiple mechanisms ofevading the immune system, development of an effective vaccine

Difference between the financial cycle and business cycle : What is the difference between the financial cycle and the business cycle?

Describe the population at risk or affected by the disease : Describe the population at risk or affected by disease, disability or chronic condition. Describe the selected research topic, health-related state or event.

How many different choices are possible : Choosing officers: A committee consists of ten women and eight men. Three committee members will be chosen as officers.

About investing-wants to ask about investing in bonds : Miguel, a recent college graduate who heard that you know something about investing, wants to ask about investing in bonds.

Investigate a family business and business family : Part A: The main assignment for this course sends you out into the field to investigate a family business and business family of your own choosing.

Write a business proposal as an intrapreneur : You are working for a healthcare company as an RN. Your supervisor has requested that you help write a business proposal as an intrapreneur.

Construct the control charts : After collecting data for 30 days, you plan to construct the control charts.

Analyze how you compete in the current job market : Double the number of nurses with a doctorate by 2020. How will increasing your level of education affect how you compete in the current job market?

User Account

All Pages