Question

In: Accounting

Mrs Atkinson is 60 year old and just retired. She received a lump sum of £60,000...

Mrs Atkinson is 60 year old and just retired. She received a lump sum of £60,000 in addition to £1000 per month from her pension fund. She comes to you as her financial advisor seeking for investment advice. Considering her age and financial situation, what is your financial advice?

Hint: consider different investment options in money and capital market.                                                                                                                                                             

Solutions

Expert Solution

Following are  different investment options in money and capital market.

MONEY MARKET :The money market refers to the trading which is very short term dent investment and consedering the whole sale level ,it involves large volume trades between institution and traders and at the retail level ,it includes money market mutual funds bought by individual investor and money market account which is opened by various bank customers. The following are the different types  MONEY MARKET OPTIONS:

CERTIFICATE OF DEPOSIT: This is one kind of of investment in Money Market. These are issued at discounted price which range between 7 to 1 year.

COMMERCIAL PAPERS:They usually have fixed maturity period which can range from 1 day to 270 days. They offer higher return as compared to treasury bills.

BANKER'S ACCEPTANCE:It is a document which that promises future payments whichis guided by the commercial bank.IT rangesbetween 30 days to 180 days.

TREASUREY BILLS: These are issued by the central Government and are known as safest money market instruments,They come with different maturity periods like 1 year, 6 months and 3months.

CAPITAL MARKET: Capital Market is a market where buyer and seller engage in trade of financial securities like Bonds ,Stock etc.Capital market consist of Primary and Secondary Market and the most common capital market are stock market and bond market.These market generally trade in Long Term securities.

Following are the different types of Capital Market:

1)PRIMARY MARKET( New Issue Market):It is also known as new issue market.Different types of primary market are

Public issue- Securities are issued to all the members of the  public who are eligible to participate in the issue.

Private Placements- It is a sale of securities to a selective group of people.

Rights and bonus issue -Securities are offered to existing investors by offering them to buy more at a pre determined price

2)SECONDARY MARKET(Stock Exchange)- These are further classified into two categories:

Over the counter-Over the counter is the decentralised market in which the participant trade stock ,commodities currencies and other instruments directly between twp parties without cenral exchange or boker.It donot have physical location istead they are traded electronically.

Stock Exchanges-Stock Exchanges are centralised platform where securities transaction takes place between buyerand seller.

Plz upvote if u find the solution to be helpful.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

A lump-sum election allows a taxpayer to: Elect ten-year averaging on the lump-sum payment. Evenly allocate the lump-sum...
A lump-sum election allows a taxpayer to: Elect ten-year averaging on the lump-sum payment. Evenly allocate the lump-sum benefit over the current year and the prior years. Include the social security benefits received for prior years in current-year benefits. Treat a lump-sum social security benefit as if the benefits for prior years had been received in 
Mary Johnson recently received a lump sum of $240,000 after selling her old house in upstate...
Mary Johnson recently received a lump sum of $240,000 after selling her old house in upstate New York. Mary would like to invest this amount of money. Her local bank offers Mary an available Gold Client account for her entire $240,000 deposit that guarantees 3.75% return regardless of the future market climate. Mary is also interested in investing her $240,000 in two stock options. The first one is to spend the entire $240,000 to purchase stocks from EliteCure, an upcoming...
Mary Johnson recently received a lump sum of $240,000 after selling her old house in upstate...
Mary Johnson recently received a lump sum of $240,000 after selling her old house in upstate New York. Mary would like to invest this amount of money. Her local bank offers Mary an available Gold Client account for her entire $240,000 deposit that guarantees 3.75% return regardless of the future market climate. Mary is also interested in investing her $240,000 in two stock options. The first one is to spend the entire $240,000 to purchase stocks from EliteCure, an upcoming...
Mrs Lee is a 60 years old woman. She is the housewife and lives with his...
Mrs Lee is a 60 years old woman. She is the housewife and lives with his husband and son in the public estate. Last week, she went to the wet market for buying food and groceries. She slipped fall on the street. Her right upper arm and armpit region were hit on the kerb. She went home and massage the armpit and upperarm immediately with massage oil. However pain over upper arm and armpit were still. At evening severe bruising...
Mrs. Breathless is a 42 year old female, just getting off a late shift. She reports...
Mrs. Breathless is a 42 year old female, just getting off a late shift. She reports to the ER in the early morning with shortness of breath. After several test, the following results are confirmed: ABG (arterial blood gases) lab results are: pH=7.44, PaCO2 = 28, HCO3 = 24. Problems: PaCO2 is low, pH is on the high side of normal therefore compensate respiratory alkalosis, PaO2 is low probably due to mucous displacing air in the alveoli affected by the...
Case Scenario Mrs Lee is a 60 years old woman. She is the housewife and lives...
Case Scenario Mrs Lee is a 60 years old woman. She is the housewife and lives with his husband and son in the public estate. Last week, she went to the wet market for buying food and groceries. She slipped fall on the street. Her right upper arm and armpit region were hit on the kerb. She went home and massage the armpit and upperarm immediately with massage oil. However pain over upper arm and armpit were still. At evening...
Case Scenario Mrs Lee is a 60 years old woman. She is the housewife and lives...
Case Scenario Mrs Lee is a 60 years old woman. She is the housewife and lives with his husband and son in the public estate. Last week, she went to the wet market for buying food and groceries. She slipped fall on the street. Her right upper arm and armpit region were hit on the kerb. She went home and massage the armpit and upper arm immediately with massage oil. However pain over upper arm and armpit were still. At...
1. What is the present value of a $150 lump sum to be received in six...
1. What is the present value of a $150 lump sum to be received in six years if the opportunity cost rate is 10 percent? A. $62.09 B. $65.61 C. $84.67 D. $85.69 E. $78.42 2. You buy a seven-year, 6 percent savings certificate for $1,000. If interest is compounded annually, what will its value be at maturity? A. $1,567.43 B. $1,486.87 C. $1,601.03 D. $1,503.62 E. $1,466.33
Mrs. B comes to the clinic today because she felt a lump in her breast. She...
Mrs. B comes to the clinic today because she felt a lump in her breast. She is extremely anxious and wants to know if she is going to die. (Learning Objectives: 10, 11, 14, and 18) 1. If you were the nurse who greets Mrs. B, how might you respond to her concerns and anxiety? 2. What are some questions that may be helpful in identifying any risk factors she may have for any type of cancer? Give the rationale...
Norman is a 70 year old retired worker. Last year he received social security payment of...
Norman is a 70 year old retired worker. Last year he received social security payment of $20,000. To downsize, he sold his 40 year old house for $240,000 and bought a brand new apartment for $160,000. He paid $4000 to his real estate agent. He also sold some of his stock holdings and earned $15,000. He had to pay $1000 to his stockbroker as commission. What was Norman’s contributions to the GDP last year? Explain why/how you get your answer.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT