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BUS522 Financial Tools for Managers

Unit 2 Discussion

Bond Risk

Most people view bonds in highly rated companies or municipalities as “safe” investments.

If you could safely say that the bond originator will not default, what are the other risks to holding a bond?

Provide an example of how you could lose money on a default free bond.

In response to your peers, are all the risks captured? What are some ways, looking at your own investments, you could balance the risks?

Annuity

What are the upsides and downsides to annuities for retirees?

What future assumptions do you have to make about market conditions for annuities to make sense for retirees?

In response to your peers, discuss any other upside and downsides to annuities for retirees that may not have been presented in the post. Considering the assumptions made, what could be some potential outcomes?

 

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