Question

Callahan and megan plan to invest in corporate securities. while callahan plans to retire next year on his 65th birthday, megan is celebrating her first job after college and her 22nd birthday. which of the two investors would be well advised to choose a more conservative investment strategy? a. callahanb. megan

Answer 1

Answer:

a. callahanb

Explanation:

Conservative investment strategy means investing in a less risky asset so the there is certain cash flow . Investment in govt bonds or treasury bills or company debentures etc of good rating are example of conservative investment strategy.

Old timers should opt for conservative investment . It is so because their risk bearing capacity is low. They can be reined in case of any windfall loss .

They have fixed liability in the form of medical expenses etc.

On the other hand youngsters have no such fixed liability . So they go for some risky alternative to take advantage of risk premium.