1. Describe the stage in the adult life cycle (Chapter 1, Exhibit 1-1) that Jamie Lee and Ross are experiencing right now, What are some of the financial activities that they should be partieipating in at this stage?
2. After reviewing Jamie Lee and Ross’s current financial situation, suggest specific and measurable short-lerm and long-term financial goals that can be implemented at this stage.
3. Using the investment goal guidelines, assess the validity of Jamie Lee and Ross’s short- and long-term financial goals and objectives (college education for the kids; retirement; and a second home).
4. Using the formula to determine the percentage of growth investments discussed in this chapter, determine how much of Jamie Lee and Ross’s investments should be growth investments? How should the remaining investments be distributed, and what is the associated risk of each type of investment?
5. Jamie Lee and Ross need to evaluate their emergency fund of $21,000. Will their ent emergency fund be sufficient to cover them should one of them lose their job?
6. Jamie Lee and Ross agree that by accomplishing their short-term goals, they can bud- get $5,000 a year toward their Iong-term investment goals. They are estimating that with the allocations recommended by their financial advisor, they will see an average return of 7 percent on their investments. The triplets will begin college in 15 years and pres- will need $100,000 for tuition. Using the time value of money information found in the Figure It Out! feature in this chapter, decide if Jamie Lee and Ross will be on track to reach their long-term financial goals of having enough money from their investments to pay the triplets college tuition.
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