Investment Portfolio This research develops an investment

INVESTOR DESCRIPTION, AND INVESTMENT

The potential investor is assumed to be a woman in her forties, who has been recently divorced. Her tangible assets include (1) a residence (the former family residence), which, it is further assumed she holds free and clear of any financial encumbrances, (2) a 1988 Buick automobile (also assumed to be free and clear of financial encumbrances), and (3) $250,000 in cash.

It is further assumed that the client has no obligations to other persons (family or otherwise) which impose financial burdens, and that no financial claims against the client are outstanding. It is also assumed that the client has neither a need nor a desire to remain in her current residence, and that no legal conditions exist which would cause it to be compelling for her to remain in the residence.

Consistent with her age and station in life, the client's investment objectives are essentially conservative in char

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convertible bond is the market value of the common stocks into which it may be converted. Thus, if the conversion ratio for a convertible bond is 20:1 and the appropriate common stocks are selling for $20, the conversion value of the convertible bond would be $400. The conversion value of a convertible bond may be either higher or lower than its investment value, depending upon the price of the common stock into which it may be converted. 5. Market value of a convertible bond: The market value of a convertible bond cannot be less than its investment value, because its investment value is a component of its market value. If the market were to determine that the common stocks into which it could be converted had no value, the convertible bond's market value would equal its investment value. The market value of a convertible bond also cannot be less than its conversion value, as it is always worth, at least, to the value of the common stocks into which it may be converted. In almost all instances, the market value of a convertible bond will exceed its investment value. 6. Conversion premium: The difference between the market price for a convertible bond and the higher of its investment and conversion v
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Approximate Word count = 5242
Approximate Pages = 21 (250 words per page)

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