Discussion Questions Week 2 Essay Example | Topics and Well Written Essays - 750 words - 2

Discussion Questions Week 2 - Essay Example These are some of the most commonly used financial instrument retirement financial plan or portfolio since these investments are considered risk free since they are not affected by economic or financial market cycles, like stocks for example. The time frame of the investments before retirement, the investor’s risk adversity as well as overall investment goals of the individual are the main factors that determine the required rate of return on the principal invested. Stocks and derivatives are the other type financial instruments utilized in a retirement plan. They are not directly affected by time of money, but are subject to fluctuations in economic and market conditions. Therefore they are capable of providing much greater overall level of return, albeit with the appropriate increased level of risk, since your investment is not protected by the issuing bank or the FDIC. In order to best determine the ratio of safe investments versus more speculative ones such as stocks and corporate bonds the investor must decide the portfolio breakdown that best fills their investments goals and acceptable level of risk.. 2) A loan amortization schedule provides a complete timeline of all the payments to be made during the lifetime of the loan contract. It provides the user with a complete breakdown of all the payments, including the amounts to be allocated to principal and interest for each individual monthly payment. It gives the owner to calculate at any time the amount paid towards principal as well as interest at any point during the life of the loan. The amortization schedule could be used to determine interest rate by modifying the cash flow time line equation and solving for the present value interest factor, which would provide you with the loan interest rate. By consulting the PVIF table and looking for the