A 60-year old man is looking to create a portfolio that will provide current income and preservation of capital. Which of the following portfolios would be the BEST recommendation to the client?

Question

Social Studies

Paris Dawson

30 April, 15:25

A 60-year old man is looking to create a portfolio that will provide current income and preservation of capital. Which of the following portfolios would be the BEST recommendation to the client?

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Answers (1)

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Trinity Garza · Answer 1

The best option this man has is to invest in: Treasury bills, a money market mutual fund, and bank certificates deposite.

Explanation:

Even though you don't present any options the best option for him is 3 different products and these 3 different products have one important factor, they won't represent a money loss while they provide an increase in value.

So, treasury bills are a very safe investment because there is almost cero possibility to not make money on them. Also, they are a very solid instrument of investment. Mutual funds are also very safe investment instruments that can make a decent amount o profit each year or quarter considering the experience of the und manager. And finally, certificate deposits will provide the biggest risk-free element that can exist. So, in our case, three options will provide a solid mean of income and safety.