NO.PZ201805280100000302
问题如下：
Emma Young, a 47-year-old single mother of two daughters, ages 17 and 20, recently sold a business for $5.5 million net of taxes and put the proceeds into a money market account. Her other assets include a tax-deferred retirement account worth $3.0 million, a $500,000 after-tax account designated for her daughters’ education, a $400,000 after-tax account for unexpected needs, and her home, which she owns outright.
Her living expenses are fully covered by her job. Young wants to retire in 15 years and to fund her retirement from existing assets. An orphan at eight who experienced childhood financial hardships, she places a high priority on retirement security and wants to avoid losing money in any of her three accounts.
A broker proposes to Young three portfolios, shown in Exhibit 1. The broker also provides Young with asset class estimated returns and portfolio standard deviations in Exhibit 2 and Exhibit 3, respectively. The broker notes that there is a $500,000 minimum investment requirement for alternative assets. Finally, because the funds in the money market account are readily investible, the broker suggests using that account only for this initial investment round.
Young wants to earn at least 6.0% after tax per year, without taking on additional incremental risk. Young’s capital gains and overall tax rate is 25%.
Determine which proposed portfolio most closely meets Young’s desired objectives. (Circle one.) Justify your response.
选项：
解释：
Portfolio 3 most closely meets Young’s desired objectives. Young wants to earn at least 6.0% after tax per year, without taking on additional incremental risk. 1 has return of 12.15%, 2 has return of 8.5% and 3 has return of 8.6%. Although 1 has highest return, it has largest volatility of 28.2%. So 1 takes on additional incremental risk. 2 and 3 has similar return but 3 has a lower volatility.
1 invest 10% of asset to private equity. The broker notes that there is a $500,000 minimum investment requirement for alternative assets. The total asset of $5.5 million so he invest 0.55 million. It fulfills the minimum investment requirement. 2 invest 5% of asset to private equity so he invest 0.275 million. It does not fulfill the minimum investment requirement. In conclusion, Portfolio 3 most closely meets Young’s desired objectives.