Question

Advise the Sampsons on the maturity to select when investing their savings for their children’s education. Describe anyadvantages or disadvantages of the relatively short-term maturities versus the longer-term maturities.

Answer 1

Answer:

I'll advise the Simpson's based on when the children are going to school.

Explanation:

short term bonds is a bond with low yields and low risks, while long term bonds offer higher yields coupled greater risk and price fluctuations.

When investing maturities for their children, I'll advise the Simpsons to take into consideration when the children will commence school. If the children are starting school in few years maybe a year or two years, a short term maturity is essential but if one wants to save for his children who are still very young and intends saving for their higher education which might be ten years later, the long term maturity is advised as it will bring about more return.