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FIN 420 Week 3 Individual Problem Worksheet

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1. Complete Worksheet 37 in Focus on Personal Finance, “Your
Financial Plan – Evaluating Corporate Bonds.”
2. Explain the principle of asset allocation. Using the Internet or library
research, prepare a 2-minute presentation describing why the principle
of asset allocation is important when establishing an investment
program.
3. Assume you are 59 years old, want to retire in 6 years, and currently
have an investment portfolio valued at $550,000 invested in technology
stocks. After talking with friends and relatives, you have decided that
you have “too many eggs in one basket.” Based on this information,
use the asset allocation method described in this chapter and use the
following table to diversify your investment portfolio. Then answer the
following two questions:
o What are the advantages of asset allocation?
How could the time your investments have to work for you and your
age affect your asset allocation?
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FIN 420 Week 3 Learning Team Problems

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Assume that you are choosing an investment for your retired parents.
What are the advantages and disadvanges of each of the following?
o a bond issued by the federal government,
o a state or local government,
o or a corporation?