Please read the continuing case then answer the questions

Question Description

1. What are the advantages and disadvantages of investing in a technology company’s IPO? Will they be guarantecd a large return from this investment? At this life stage. would you recommend that Jamie Lee and Ross invest in an IPO? Why or why not?

2. Jamie Lee’s father suggested that they purchase stock in a company that he has held shares in for decades. They want to take advantage of the stock tip, but Jamie Lee and Ross are trying to decide between purchasing the company’s common stock and pre- ferred stock. How would you describe the differences between common and preferred?

3. Currently, the economy is in the recovery stage. Referring to Exhibit 12-3, what types of stock would you suggest for Jamie and Ross to invest in considering their life stage and current moderate investment strategies? What characteristics are associated with the types of investments you suggested?

4. Suppose Jamie Lee and Ross are evaluating corporate stocks to add to their investment portfolio. Using Your Personal Financial Plan sheet 38, select a company from your own personal experiences, such as an automobile or technology company, and research the information needed to complete the worksheet.

a. Based on your research, should Jamie Lee and Ross invest in this company? Provide support for your evaluation based on the information you reported in Your Personal Financial Plan sheet 38.

b. If they should invest in the company you suggested, how much of their $50,000 inheritance should they allocate toward the purchase of shares in the company?

c. Regardless of your position on whether they should invest in your chosen company, if Jamie Lee and Ross went ahead and purchased shares of stock in that company, how many shares could they purchase with the $50,000? d. What would be the total transaction cost if they purchased the shares online? (List the source for your answer.)

Notes:

Chapter 12

Focus on personal Finance( text book )

Sixth Edition

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