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their children, Mary (age 10) and José (age 4), to live comfortably.
Although he lacks formal education beyond the 10th grade, Angel has
become an avid reader. He enjoys reading about current events and
personal finance, particularly investing. He especially likes Money
magazine, from which he has gained numerous ideas for better
managing the family’s finances. Because of the long hours required to
run the business, Angel can devote 3 to 4 hours a day (on the job) to
reading. Recently Angel and Marie were notified that Marie’s uncle
had died and left them a portfolio of stocks and bonds with a current
market value of $300,000. They were elated to learn of their good
fortune but decided it would be best not to change their lifestyle as a
result of this inheritance. Instead, they want their newfound wealth to
provide for their children’s college educations as well as their own
retirement. They decided that, like their uncle, they would keep these
funds invested in stocks and bonds. Angel felt that in view of this
plan, he needed to acquaint himself with the securities currently in the
portfolio. He knew that to manage the portfolio himself, he would
have to stay abreast of the securities markets as well as the economy
in general. He also realized that he would need to follow each security
in the portfolio and continuously evaluate possible alternative
securities that could be substituted as conditions warranted. Because
Angel enjoyed using his spare time to follow the market, he strongly
believed that with proper information, he could manage the portfolio.
Given the amount of money involved, Angel was not too concerned
with the information costs; rather, he wanted the best information he
could get at a reasonable price. Questions a. Explain what role the
Wall Street Journal and/or Barron’s might play in meeting Angel’s
needs. What other general sources of economic and current event
information would you recommend to Angel? Explain. b.
How
might Angel be able to use the services of Standard & Poor’s
Corporation, Mergent, and theValue Line Investment Survey to learn
about the securities in the portfolio? Indicate which, if any, of these
services you would recommend, and why. c. Recommend some