Danielle Paftee, age 55, has an investment account designed to ftind her granddaughter's college education. Paftee's granddaughter is two years old. Paftee also will use the account for intermittent health care expenses for her elderly parents, whose health plans and retirement plans do not adequately cover their expenses.
Which of the following statements regarding Paftee's investment objectives and constraints is least likely correct?
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A. B. C.C
Based on the given information, let's evaluate each statement regarding Danielle Paftee's investment objectives and constraints:
A. Paftee has a long-term time horizon. This statement is likely correct. Paftee's investment account is intended to fund her granddaughter's college education, which suggests a long-term goal. College education is typically a goal that requires saving and investing over an extended period of time, considering the child's age (two years old) and the time required to accumulate sufficient funds.
B. Paftee has a significant liquidity requirement. This statement is likely correct. Paftee intends to use the investment account for intermittent healthcare expenses for her elderly parents. Healthcare expenses can be unpredictable and may require immediate access to funds. Therefore, Paftee would have a need for liquidity to cover these expenses as they arise.
C. Paftee should focus on total return with very low current income requirements. This statement is least likely correct. Given the two objectives stated, i.e., funding her granddaughter's college education and covering healthcare expenses for her parents, it is important to consider the income requirements. Funding college education and addressing healthcare expenses are typically significant financial commitments, which may require a steady stream of income. Therefore, Paftee would likely have some current income requirements rather than very low income requirements. Total return, which includes both capital appreciation and income, may be a more suitable investment approach for Paftee to generate the necessary funds to meet her objectives.
In summary, the statement that is least likely correct is C. Paftee should focus on total return with very low current income requirements.