Homosexuality in Britain Essay Example | Topics and Well Written Essays - 500 words

Homosexuality in Britain - Essay Example According to the article, the orientation for preference to same sex relations remain covert as it was categorized as criminal in nature to expose homosexual acts, in private or in public, even by consenting adults prior to 1969. There was no organization in England promoting for any homosexual reform that it waited for American ideals of homosexual liberation to emerge. Despite the British laws prevailing to be predominantly homophobic, homosexual content in English literature still remained sporadic, depending on the creativity and restraint of the writer. British literature had patiently waited for fourteen years since the Wolfenden Report of 1953 recommending that homosexual behavior between consenting adults in private no longer be criminalized in England, before they can freely express homosexual content in their literary works. It is my personal contention that the issue of homosexuality remains to be controversial in other parts of the world until contemporary times. What American culture had promoted in terms of liberalizing homosexual behavior was readily accepted in other Western civilizations. Some Eastern culture remains to be still conservative in openly accepting homosexual acts given the cultural values and beliefs, especially pinning on religious orientations. In literature, however, I support freedom of creative expression including the writing of homosexual content conforming to ethical frameworks. Wanton disregard for the readers’ morals would render their literary work utterly improvident. I share Jeremy Bentham’s belief that in writing about homosexuality, one must weigh â€Å"the pleasure of consensual homosexual relations against the pain or harm it causes the general public†¦ by causing no harm to others, homosexuality is justified by the pleasures of those who practice it.† (glbtq, 2002,

Multi-Layered Security Plan Essay Example for Free

Multi-Layered Security Plan Essay Protecting sensitive or confidential data is paramount in many businesses. In the event such information is made public, businesses may face legal or financial ramifications. At the very least, they will suffer a loss of customer trust. In most cases, however, they can recover from these financial and other losses with appropriate investment or compensation Having information of different security levels on the same computer systems poses a real threat. It is not a straight-forward matter to isolate different information security levels, even though different users log in using different accounts, with different permissions and different access controls (Red Hat, Inc. 2006). Below I have listed the IT infrastructure of Richman Investments along with recommendations in each infrastructure on levels of security that should be implemented for a more secure network. IT Infrastructure Affected 1. User Domain: The people who access an organization’s information system. * The first thing that should be implemented is a mandatory Computer Security training session to educate the users on the proper use of work computers. 2. Workstation Domain: Users (most) connecting to the IT infrastructure. * The workstation domain comes with its own problems such as unauthorized access to the system, the way to fix this problem would be to implement access policies and guidelines. 3. LAN Domain: A collection of computers connected to one another or to a common connection medium. * Implement second or third level identity check to gain access to sensitive systems, applications, and date. Keep all hardware in a secure location with access only with proper ID. 4. LAN-to-WAN Domain: Link between the Wide Area Network (WAN) and the Internet. * Conduct post configuration penetration tests of the layered security solution within the LAN-to-WAN Domain. Test inbound and outbound traffic and fix any gaps. Also, apply e-mail server and attachments antivirus and e-mail quarantining for unknown file types. Stop domain-name Web site access based on content-filtering policies. 5. WAN Domain: Wide Area Network (WAN) connects remote locations to the Local Area Network (LAN). * Encrypt confidential data transmissions through service provider WAN using VPN tunnels. 6. Remote Access Domain: Connects remote users to the organization’s IT infrastructure. * Remote Access Domain, Being that the users are off site it is hard to say that the users password information has not been compromised. In such cases when abnormalities are spotted or data is accessed without proper authorization, data should be completely encrypted to prevent any sensitive materials from being sold or presented to the open market. 7. System/Application Domain- Holds all the mission-critical systems, applications, and data. * Develop a business continuity plan for mission-critical applications providing tactical steps for maintaining availability of operations. Perform regular rigorous software and Web-application testing and penetration testing prior to launch.

A Change of Fate in A Tale of Two Cities Essay -- Tale Two Cities Essa

A Change of Fate in A Tale of Two Cities      Ã‚  Ã‚   Authors may use one character to instantaneously change the fate of another character. Charles Dickens' A Tale of Two Cities presents such situations through the characters Lucie Manette, Dr. Manette and Charles Darnay. Lucie, unaware of the existence of her supposedly dead father, Dr. Manette, suddenly discovers through Jarvis Lorry that her father still lives. Lucie learns of the optimistic plans to return her beloved father back to a healthy condition and her future involvement in her father's life. Dr. Manette, after 18 years of imprisonment and harsh treatment, experiences detrimental harm to his mental state and loses his ability to lead a normal life. However, Lorry reunites Dr. Manette with his daughter and travels with them to England in hopes of brightening Dr. Manette's future and improving his deteriorated condition. Later, Charles Darnay, a prisoner in England on trial for treason, receives an acquittal, barely escaping death. Darnay avoids a hi ghly expected guilty verdict with the assistance of his defense lawyers, Mr. Stryver and Mr. Carton. By examining Lucie Manette, Dr. Manette and Charles Darnay, the reader comes to see that through the assistance and intervention of others, one's fate suddenly changes to benefit him.    Lucie Manette experiences a positive change of fate with the sudden intervention and assistance of Mr. Lorry. Lorry unexpectedly notifies Lucie of the existence of her father, as he describes his plans and her role in reviving Dr. Manette to a healthy state. "But he has been found. He is alive...Your father has been taken to the house of an old servant in Paris, and we are going there: I, to identify him if I can:... ...tance of other characters. Mr. Lorry reunites Lucie with her father, Dr. Manette, brightening the future of both of them. Lucie, deprived of a father during childhood, suddenly discovers the existence of her father and her golden opportunity to bond with him. Dr. Manette, troubled by years of harsh treatment, begins his once unimaginable path to recovery. Later, Charles Darnay, a prisoner suspected of treason, avoids a highly expected guilty verdict with assistance of his lawyers, Stryver and Carton. Dickens masterfully depicts that one's fate can change at any instant to benefit him. Hopefully, such a sudden and beneficial change of fate will occur to people worldwide, especially to those living in a constant state of fear and violence. Work Cited Dickens, Charles. A Tale of Two Cities. The Oxford Illustrated Dickens. 1949. Oxford: Oxford UP, 1987.

Prelude to Foundation Chapter 11 Sacratorium

AURORA-†¦ A mythical world, supposedly inhabited in primordial times, during the dawn of interstellar travel. It is thought by some to he the perhaps equally mythical â€Å"world of origin† of humanity and to be another name for â€Å"Earth.† The people of the Mycogen (q.v.) Sector of ancient Trantor reportedly held themselves to be descended from the inhabitants of Aurora and made that tenet central to their system of beliefs, concerning which almost nothing else is known†¦ Encyclopedia Galactica 50. The two Raindrops arrived at midmorning. Raindrop Forty-Five seemed as cheerful as ever, but Raindrop Forty-Three paused just inside the door, looking drawn and circumspect. She kept her eyes down and did not as much as glance at Seldon. Seldon looked uncertain and gestured to Dors, who said in a cheerful businesslike tone of voice, â€Å"One moment, Sisters. I must give instructions to my man or he won't know what to do with himself today.† They moved into the bathroom and Dors whispered, â€Å"Is something wrong?† â€Å"Yes. Raindrop Forty-Three is obviously shattered. Please tell her that I will return the Book as soon as possible.† Dors favored Seldon with a long surprised look. â€Å"Hari,† she said, â€Å"you're a sweet, caring person, but you haven't the good sense of an amoeba. If I as much as mention the Book to the poor woman, she'll be certain that you told me all about what happened yesterday and then she'll really be shattered. The only hope is to treat her exactly as I would ordinarily.† Seldon nodded his head and said dispiritedly, â€Å"I suppose you're right.† Dors returned in time for dinner and found Seldon on his cot, still leafing through the Book, but with intensified impatience. He looked up with a scowl and said, â€Å"If we're going to be staying here any length of time, we're going to need a communication device of some sort between us. I had no idea when you'd get back and I was a little concerned.† â€Å"Well, here I am,† she said, removing her skincap gingerly and looking at it with more than a little distaste. â€Å"I'm really pleased at your concern. I rather thought you'd be so lost in the Book, you wouldn't even realize I was gone.† Seldon snorted. Dors said, â€Å"As for communications devices, I doubt that they are easy to come by in Mycogen. It would mean easing communication with tribespeople outside and I suspect the leaders of Mycogen are bound and determined to cut down on any possible interaction with the great beyond.† â€Å"Yes,† said Seldon, tossing the Book to one side, â€Å"I would expect that from what I see in the Book. Did you find out about the whatever you called it†¦ the temple?† â€Å"Yes,† she said, removing her eyebrow patches. â€Å"It exists. There are a number of them over the area of the sector, but there's a central building that seems to be the important one.-Would you believe that one woman noticed my eyelashes and told me that I shouldn't let myself be seen in public? I have a feeling she intended to report me for indecent exposure.† â€Å"Never mind that,† said Seldon impatiently. â€Å"Do you know where the central temple is located?† â€Å"I have directions, but Raindrop Forty-Five warned me that women were not allowed inside except on special occasions, none of which are coming up soon. It's called the Sacratorium.† â€Å"The what.† â€Å"The Sacratorium.† â€Å"What an ugly word. What does it mean?† Dors shook her head. â€Å"It's new to me. And neither Raindrop knew what it meant either. To them, Sacratorium isn't what the building is called, it's what it is. Asking them why they called it that probably sounded like asking them why a wall is called a wall.† â€Å"Is there anything about it they do know?† â€Å"Of course, Hari. They know what it's for. It's a place that's devoted to something other than the life here in Mycogen. It's devoted to another world, a former and better one.† â€Å"The world they once lived on, you mean?† â€Å"Exactly. Raindrop Forty-Five all but said so, but not quite. She couldn't bring herself to say the word.† â€Å"Aurora?† â€Å"That's the word, but I suspect that if you were to say it out loud to a group of Mycogenians, they would be shocked and horrified. Raindrop Forty-Five, when she said, ‘The Sacratorium is dedicated to-‘, stopped at that point and carefully wrote out the letters one by one with her finger on the palm of her hand. And she blushed, as though she was doing something obscene.† â€Å"Strange,† said Seldon. â€Å"If the Book is an accurate guide, Aurora is their dearest memory, their chief point of unification, the center about which everything in Mycogen revolves. Why should its mention be considered obscene? Are you sure you didn't misinterpret what the Sister meant?† â€Å"I'm positive. And perhaps it's no mystery. Too much talk about it would get to tribespeople. The best way of keeping it secret unto themselves is to make its very mention taboo.† â€Å"Taboo?† â€Å"A specialized anthropological term. It's a reference to serious and effective social pressure forbidding some sort of action. The fact that women are not allowed in the Sacratorium probably has the force of a taboo. I'm sure that a Sister would be horrified if it was suggested that she invade its precincts.† â€Å"Are the directions you have good enough for me to get to the Sacratorium on my own?† â€Å"In the first place, Hari, you're not going alone. I'm going with you. I thought we had discussed the matter and that I had made it clear that I cannot protect you at long distance-not from sleet storms and not from feral women. In the second place, it's impractical to think of walking there. Mycogen may be a small sector, as sectors go, but it simply isn't that small.† â€Å"An Expressway, then.† â€Å"There are no Expressways passing through Mycogenian territory. It would make contact between Mycogenians and tribespeople too easy. Still, there are public conveyances of the kind that are found on less developed planets. In fact, that's what Mycogen is, a piece of an undeveloped planet, embedded like a splinter in the body of Trantor, which is otherwise a patchwork of developed societies.-And Hari, finish with the Book as soon as possible. It's apparent that Rainbow Forty-Three is in trouble as long as you have it and so will we be if they find out.† â€Å"Do you mean a tribesperson reading it is taboo?† â€Å"I'm sure of it.† â€Å"Well, it would be no great loss to give it back. I should say that 95 percent of it is incredibly dull; endless in-fighting among political groups, endless justification of policies whose wisdom I cannot possibly judge, endless homilies on ethical matters which, even when enlightened, and they usually aren't, are couched with such infuriating self-righteousness as to almost enforce violation.† â€Å"You sound as though I would be doing you a great favor if I took the thing away from you.† â€Å"Except that there's always the other 5 percent that discusses the never-to-be-mentioned Aurora. I keep thinking that there may be something there and that it may be helpful to me. That's why I wanted to know about the Sacratorium. â€Å"Do you hope to find support for the Book's concept of Aurora in the Sacratorium?† â€Å"In a way. And I'm also terribly caught up in what the Book has to say about automata, or robots, to use their term. I find myself attracted to the concept.† â€Å"Surely, you don't take it seriously?† â€Å"Almost. If you accept some passages of the Book literally, then there is an implication that some robots were in human shape.† â€Å"Naturally. If you're going to construct a simulacrum of a human being, you will make it look like a human being.† â€Å"Yes, simulacrum means ‘likeness,' but a likeness can be crude indeed. An artist can draw a stick figure and you might know he is representing a human being and recognize it. A circle for the head, a stalk for the body, and four bent lines for arms and legs and you have it. But I mean robots that really look like a human being, in every detail.† â€Å"Ridiculous, Hari. Imagine the time it would take to fashion the metal of the body into perfect proportions, with the smooth curve of underlying muscles.† â€Å"Who said ‘metal,' Dors? The impression I got is that such robots were organic or pseudo-organic, that they were covered with skin, that you could not easily draw a distinction between them and human beings in any way.† â€Å"Does the Book say that?† â€Å"Not in so many words. The inference, however-â€Å" â€Å"Is your inference, Hari. You can't take it seriously.† â€Å"Let me try. I find four things that I can deduce from what the Book says about robots-and I followed up every reference the index gave. First, as I say, they-or some of them-exactly resembled human beings; second, they had very extended life spans-if you want to call it that.† â€Å"Better say ‘effectiveness,' † said Dors, â€Å"or you'll begin thinking of them as human altogether.† â€Å"Third,† said Seldon, ignoring her, â€Å"that some-or, at any rate, at least one-continues to live on to this day.† â€Å"Hari, that's one of the most widespread legends we have. The ancient hero does not die but remains in suspended animation, ready to return to save his people at some time of great need. Really, Hari.† â€Å"Fourth,† said Seldon, still not rising to the bait, â€Å"there are some lines that seem to indicate that the central temple-or the Sacratorium, if that's what it is, though I haven't found that word in the Book, actually-contains a robot.† He paused, then said, â€Å"Do you see?† Dors said, â€Å"No. What should I see?† â€Å"If we combine the four points, perhaps a robot that looks exactly like a human being and that is still alive, having been alive for, say, the last twenty thousand years, is in the Sacratorium.† â€Å"Come on, Hari, you can't believe that.† â€Å"I don't actually believe it, but I can't entirely let go either. What if its true? What if-its only one chance out of a million, I admit-it's true? Don't you see how useful he could be to me? He could remember the Galaxy as it was long before any reliable historical records existed. He might help make psychohistory possible.† â€Å"Even if it was true, do you suppose the Mycogenians would let you see and interview the robot?† â€Å"I don't intend to ask permission. I can at least go to the Sacratorium and see if there's something to interview first.† â€Å"Not now. Tomorrow at the earliest. And if you don't think better of it by morning, we go.† â€Å"You told me yourself they don't allow women-â€Å" â€Å"They allow women to look at it from outside, I'm sure, and I suspect that is all we'll get to do.† And there she was adamant. Hari Seldon was perfectly willing to let Dors take the lead. She had been out in the main roadways of Mycogen and was more at home with them than he was. Dors Venabili, brows knitted, was less delighted with the prospect. She said, â€Å"We can easily get lost, you know.† â€Å"Not with that booklet,† said Seldon. She looked up at him impatiently. â€Å"Fix your mind on Mycogen, Hari. What I should have is a computomap, something I can ask questions of. This Mycogenian version is just a piece of folded plastic. I can't tell this thing where I am. I can't tell it by word of mouth and I can't even tell it by pushing the necessary contacts. It can't tell me anything either way. It's a print thing.† â€Å"Then read what it says.† â€Å"That's what I'm trying to do, but it's written for people who are familiar with the system to begin with. We'll have to ask.† â€Å"No, Dors. That would be a last resort. I don't want to attract attention. I would rather we take our chances and try to find our own way, even if it means making one or two wrong turns.† Dors leafed through the booklet with great attention and then said grudgingly, â€Å"Well, it gives the Sacratorium important mention. I suppose that's only natural. I presume everyone in Mycogen would want to get there at one time or another.† Then, after additional concentration, she said, â€Å"I'll tell you what. There's no way of taking a conveyance from here to there.† â€Å"What?† â€Å"Don't get excited. Apparently, there's a way of getting from here to another conveyance that will take us there. We'll have to change from one to another.† Seldon relaxed. â€Å"Well, of course. You can't take an Expressway to half the places on Trantor without changing.† Dors cast an impatient glance at Seldon. â€Å"I know that too. It's just that I'm used to having these things tell me so. When they expect you to find out for yourself, the simplest things can escape you for a while.† â€Å"All right, dear. Don't snap. If you know the way now, lead. I will follow humbly.† And follow her he did, until they came to an intersection, where they stopped. Three white-kirtled males and a pair of gray-kirtled females were at the same intersection. Seldon tried a universal and general smile in their direction, but they responded with a blank stare and looked away. And then the conveyance came. It was an outmoded version of what Seldon, back on Helicon, would have called a gravi-bus. There were some twenty upholstered benches inside, each capable of holding four people. Each bench had its own doors on both sides of the bus. When it stopped, passengers emerged on either side. (For a moment, Seldon was concerned for those who got out on the traffic side of the gravi-bus, but then he noticed that every vehicle approaching from either direction stopped as it neared the bus. None passed it while it was not moving.) Dors pushed Seldon impatiently and he moved on to a bench where two adjoining seats were available. Dors followed after. (The men always got on and got off first, he noticed.) 51. â€Å"For instance,† she said and pointed to a smooth boxed-off area on the back of the bench directly before each of them. As soon as the conveyance had begun to move, words lit up, naming the next stop and the notable structures or crossways that were nearby. â€Å"Now, that will probably tell us when we're approaching the changeover we want. At least the sector isn't completely barbaric.† â€Å"Good,† said Seldon. Then, after a while, leaning toward Dors, he whispered, â€Å"No one is looking at us. It seems that artificial boundaries are set up to preserve individual privacy in any crowded place. Have you noticed that?† â€Å"I've always taken it for granted. If that's going to be a rule of your psychohistory, no one will be very impressed by it.† As Dors had guessed, the direction plaque in front of them eventually announced the approach to the changeover for the direct line to the Sacratorium. They exited and again had to wait. Some buses ahead had already left this intersection, but another gravi-bus was already approaching. They were on a well-traveled route, which was not surprising; the Sacratorium was bound to be the center and heartbeat of the sector. They got on the gravi-bus and Seldon whispered, â€Å"We're not paying.† â€Å"According to the map, public transportation is a free service.† Seldon thrust out his lower lip. â€Å"How civilized. I suppose that nothing is all of a piece, not backwardness, not barbarism, nothing.† But Dors nudged him and whispered, â€Å"Your rule is broken. We're being watched. The man on your right.† 52. Seldon's eyes shifted briefly. The man to his right was rather thin and seemed quite old. He had dark brown eyes and a swarthy complexion, and Seldon was sure that he would have had black hair if he had not been depilated. He faced front again, thinking. This Brother was rather atypical. The few Brothers he had paid any attention to had been rather tall, light-skinned, and with blue or gray eyes. Of course, he had not seen enough of them to make a general rule. Then there was a light touch on the right sleeve of his kirtle. Seldon turned hesitantly and found himself looking at a card on which was written lightly, CAREFUL, TRIBESMAN! Seldon started and put a hand to his skincap automatically. The man next to him silently mouthed, â€Å"Hair.† Seldon's hand found it, a tiny exposure of bristles at his temple. He must have disturbed the skincap at some point or another. Quickly and as unobtrusively as possible, he tugged the skincap, then made sure that it was snug under the pretence of stroking his head. He turned to his neighbor on his right, nodded slightly, and mouthed, â€Å"Thank you.† His neighbor smiled and said in a normal speaking voice, â€Å"Going to the Sacratorium?† Seldon nodded. â€Å"Yes, I am.† â€Å"Easy guess. So am I. Shall we get off together?† His smile was friendly. â€Å"I'm with my-my-â€Å" â€Å"With your woman. Of course. All three together, then?† Seldon was not sure how to react. A quick look in the other direction showed him that Dors's eyes were turned straight ahead. She was showing no interest in masculine conversation-an attitude appropriate for a Sister. However, Seldon felt a soft pat on his left knee, which he took (with perhaps little justification) to mean: â€Å"It's all right.† In any case, his natural sense of courtesy was on that side and he said, â€Å"Yes, certainly.† There was no further conversation until the direction plaque told them they were arriving at the Sacratorium and Seldon's Mycogenian friend was rising to get off. The gravi-bus made a wide turn about the perimeter of a large area of the Sacratorium grounds and there was a general exodus when it came to a halt, the men sliding in front of the women to exit first. The women followed. The Mycogenian's voice crackled a bit with age, but it was cheerful. He said, â€Å"It's a little early for lunch my†¦ friends, but take my word for it that things will be crowded in not too long a time. Would you be willing to buy something simple now and eat it outside? I am very familiar with this area and I know a good place.† Seldon wondered if this was a device to maneuver innocent tribespeople into something or other disreputable or costly, yet decided to chance it. â€Å"You're very kind,† he said. â€Å"Since we are not at all familiar with the place, we will be glad to let you take the lead.† They bought lunch-sandwiches and a beverage that looked like milk-at an open-air stand. Since it was a beautiful day and they were visitors, the old Mycogenian said, they would go to the Sacratorium grounds and eat out of doors, the better to become acquainted with their surroundings. During their walk, carrying their lunch, Seldon noted that, on a very small scale, the Sacratorium resembled the Imperial Palace and that the grounds around it resembled, on a minute scale, the Imperial grounds. He could scarcely believe that the Mycogenian people admired the Imperial institution or, indeed, did anything but hate and despise it, yet the cultural attraction was apparently not to be withstood. â€Å"It's beautiful,† said the Mycogenian with obvious pride. â€Å"Quite,† said Seldon. â€Å"How it glistens in the daylight.† â€Å"The grounds around it,† he said, â€Å"are constructed in imitation of the government grounds on our Dawn World†¦ in miniature, to be sure.† â€Å"Did you ever see the grounds of the Imperial Palace?† asked Seldon cautiously. The Mycogenian caught the implication and seemed in no way put out by it. â€Å"They copied the Dawn World as best they could too.† Seldon doubted that in the extreme, but he said nothing. They came to a semicircular seat of white stonite, sparkling in the light as the Sacratorium did. â€Å"Good,† said the Mycogenian, his dark eyes gleaming with pleasure. â€Å"No one's taken my place. I call it mine only because it's my favorite seat. It affords a beautiful view of the side wall of the Sacratorium past the trees. Please sit down. It's not cold, I assure you. And your companion. She is welcome to sit too. She is a tribeswoman, I know, and has different customs. She†¦ she may speak if she wishes.† Dors gave him a hard look and sat down. Seldon, recognizing the fact that they might remain with this old Mycogenian a while, thrust out his hand and said, â€Å"I am Hari and my female companion is Dors. We don't use numbers, I'm afraid.† â€Å"To each his†¦ or her†¦ own,† said the other expansively. â€Å"I am Mycelium Seventy-Two. We are a large cohort.† â€Å"Mycelium?† said Seldon a bit hesitantly. â€Å"You seem surprised,† said Mycelium. â€Å"I take it, then, you've only met members of our Elder families. Names like Cloud and Sunshine and Starlight-all astronomical.† â€Å"I must admit-† began Seldon. â€Å"Well, meet one of the lower classes. We take our names from the ground and from the micro-organisms we grow. Perfectly respectable.† â€Å"I'm quite certain,† said Seldon, â€Å"and thank you again for helping me with my†¦ problem in the gravi-bus.† â€Å"Listen,† said Mycelium Seventy-Two, â€Å"I saved you a lot of trouble. If a Sister had seen you before I did, she would undoubtedly have screamed and the nearest Brothers would have bustled you off the bus-maybe not even waiting for it to stop moving.† Dors leaned forward so as to see across Seldon. â€Å"How is it you did not act in this way yourself?† â€Å"I? I have no animosity against tribespeople. I'm a scholar.† â€Å"A scholar?† â€Å"First one in my cohort. I studied at the Sacratorium School and did very well. I'm learned in all the ancient arts and I have a license to enter the tribal library, where they keep book-films and books by tribespeople. I can view any book-film or read any book I wish to. We even have a computerized reference library and I can handle that too. That sort of thing broadens your mind. I don't mind a little hair showing. I've seen pictures of men with hair many a time. And women too.† He glanced quickly at Dors. They ate in silence for a while and then Seldon said, â€Å"I notice that every Brother who enters or leaves the Sacratorium is wearing a red sash.† â€Å"Oh yes,† said Mycelium Seventy-Two. â€Å"Over the left shoulder and around the right side of the waist-usually very fancily embroidered.† â€Å"Why is that?† â€Å"It's called an ‘obiah.' It symbolizes the joy felt at entering the Sacratorium and the blood one would spill to preserve it.† â€Å"Blood?† said Dors, frowning. â€Å"Just a symbol. I never actually heard of anyone spilling blood over the Sacratorium. For that matter, there isn't that much joy. it's mostly wailing and mourning and prostrating one's self over the Lost World.† His voice dropped and became soft. â€Å"Very silly.† Dors said, â€Å"You're not a†¦ a believer?† â€Å"I'm a scholar,† said Mycelium with obvious pride. His face wrinkled as he grinned and took on an even more pronounced appearance of age. Seldon found himself wondering how old the man was. Several centuries?-No, they'd disposed of that. It couldn't be and yet, â€Å"How old are you?† Seldon asked suddenly, involuntarily. Mycelium Seventy-Two showed no signs of taking offense at the question, nor did he display any hesitation at answering, â€Å"Sixty-seven.† Seldon had to know. â€Å"I was told that your people believe that in very early times everyone lived for several centuries.† Mycelium Seventy-Two looked at Seldon quizzically. â€Å"Now how did you find that out? Someone must have been talking out of turn†¦ but its true. There is that belief. Only the unsophisticated believe it, but the Elders encourage it because it shows our superiority. Actually, our life expectancy is higher than elsewhere because we eat more nutritionally, but living even one century is rare.† â€Å"I take it you don't consider Mycogenians superior,† said Seldon. Mycelium Seventy-Two said, â€Å"There's nothing wrong with Mycogenians. They're certainly not inferior. Still, I think that all men are equal.-Even women,† he added, looking across at Dors. â€Å"I don't suppose,† said Seldon, â€Å"that many of your people would agree with that.† â€Å"Or many of your people,† said Mycelium Seventy-Two with a faint resentment. â€Å"I believe it, though. A scholar has to. I've viewed and even read all the great literature of the tribespeople. I understand your culture. I've written articles on it. I can sit here just as comfortably with you as though you were†¦ [tit].† Dors said a little sharply, â€Å"You sound proud of understanding tribespeople's ways. Have you ever traveled outside Mycogen?† Mycelium Seventy-Two seemed to move away a little. â€Å"No.† â€Å"Why not? You would get to know us better.† â€Å"I wouldn't feel right. I'd have to wear a wig. I'd be ashamed.† Dors said, â€Å"Why a wig? You could stay bald.† â€Å"No,† said Mycelium Seventy-Two, â€Å"I wouldn't be that kind of fool. I'd be mistreated by all the hairy ones.† â€Å"Mistreated? Why?† said Dors. â€Å"We have a great many naturally bald people everywhere on Trantor and on every other world too.† â€Å"My father is quite bald,† said Seldon with a sigh, â€Å"and I presume that in the decades to come I will be bald too. My hair isn't all that thick now.† â€Å"That's not bald,† said Mycelium Seventy-Two. â€Å"You keep hair around the edges and over your eyes. I mean bald-no hair at all.† â€Å"Anywhere on your body?† said Dors, interested. And now Mycelium Seventy-Two looked offended and said nothing. Seldon, anxious to get the conversation back on track, said, â€Å"Tell me, Mycelium Seventy-Two, can tribespeople enter the Sacratorium as spectators?† Mycelium Seventy-Two shook his head vigorously. â€Å"Never. It's for the Sons of the Dawn only.† Dors said, â€Å"Only the Sons?† Mycelium Seventy-Two looked shocked for a moment, then said forgivingly, â€Å"Well, you're tribespeople. Daughters of the Dawn enter only on certain days and times. That's just the way it is. I don't say I approve. If it was up to me, I'd say, ‘Go in. Enjoy if you can.' Sooner others than me, in fact.† â€Å"Don't you ever go in?† â€Å"When I was young, my parents took me, but-he shook his head-â€Å"it was just people staring at the Book and reading from it and sighing and weeping for the old days. It's very depressing. You can't talk to each other. You can't laugh. You can't even look at each other. Your mind has to be totally on the Lost World. Totally.† He waved a hand in rejection. â€Å"Not for me. I'm a scholar and I want the whole world open to me.† â€Å"Good,† said Seldon, seeing an opening. â€Å"We feel that way too. We are scholars also, Dors and myself.† â€Å"I know,† said Mycelium Seventy-Two. â€Å"You know? How do you know?† â€Å"You'd have to be. The only tribespeople allowed in Mycogen are Imperial officials and diplomats, important traders, and scholars-and to me you have the look of scholars. That's what interested me in you. Scholars together.† He smiled delightedly. â€Å"So we are. I am a mathematician. Dors is a historian. And you?† â€Å"I specialize in†¦ culture. I've read all the great works of literature of the tribespeople: Lissauer, Mentone, Novigor-â€Å" â€Å"And we have read the great works of your people. I've read the Book, for instance.-About the Lost World.† Mycelium Seventy-Two's eyes opened wide in surprise. His olive complexion seemed to fade a little. â€Å"You have? How? Where?† â€Å"At our University we have copies that we can read if we have permission.† â€Å"Copies of the Book?† â€Å"Yes.† â€Å"I wonder if the Elders know this?† Seldon said, â€Å"And I've read about robots.† â€Å"Robots?† â€Å"Yes. That is why I would like to be able to enter the Sacratorium. I would like to see the robot.† (Dors kicked lightly at Seldon's ankle, but he ignored her.) Mycelium Seventy-Two said uneasily, â€Å"I don't believe in such things. Scholarly people don't.† But he looked about as though he was afraid of being overheard. Seldon said, â€Å"I've read that a robot still exists in the Sacratorium.† Mycelium Seventy-Two said, â€Å"I don't want to talk about such nonsense.† Seldon persisted. â€Å"Where would it be if it was in the Sacratorium?† â€Å"Even if one was there, I couldn't tell you. I haven't been in there since I was a child.† â€Å"Would you know if there was a special place, a hidden place?† â€Å"There's the Elders' aerie. Only Elders go there, but there's nothing there.† â€Å"Have you ever been there?† â€Å"No, of course not.† â€Å"Then how do you know?† â€Å"I don't know that there's no pomegranate tree there. I don't know that there's no laser-organ there. I don't know that there's no item of a million different kinds there. Does my lack of knowledge of their absence show they are all present?† For the moment, Seldon had nothing to say. A ghost of a smile broke through Mycelium Seventy-Two's look of concern. He said, â€Å"That's scholars' reasoning. I'm not an easy man to tackle, you see. Just the same, I wouldn't advise you to try to get up into the Elders' aerie. I don't think you'd like what would happen if they found a tribesman inside.-Well. Best of the Dawn to you.† And he rose suddenly-without warning-and hurried away. Seldon looked after him, rather surprised. â€Å"What made him rush off like that?† â€Å"I think,† said Dors, â€Å"it's because someone is approaching.† And someone was. A tall man in an elaborate white kirtle, crossed by an even more elaborate and subtly glittering red sash, glided solemnly toward them. He had the unmistakable look of a man with authority and the even more unmistakable look of one who is not pleased. 53. Hari Seldon rose as the new Mycogenian approached. He hadn't the slightest idea whether that was the appropriate polite behavior, but he had the distinct feeling it would do no harm. Dors Venabili rose with him and carefully kept her eyes lowered. The other stood before them. He too was an old man, but more subtly aged than Mycelium Seventy-Two. Age seemed to lend distinction to his still-handsome face. His bald head was beautifully round and his eyes were a startling blue, contrasting sharply with the bright all-but-glowing red of his sash. The newcomer said, â€Å"I see you are tribespeople.† His voice was more high-pitched than Seldon had expected, but he spoke slowly, as though conscious of the weight of authority in every word he uttered. â€Å"So we are,† said Seldon politely but firmly. He saw no reason not to defer to the other's position, but he did not intend to abandon his own. â€Å"Your names?† â€Å"I am Hari Seldon of Helicon. My companion is Dors Venabili of Cinna. And yours, man of Mycogen?† The eyes narrowed in displeasure, but he too could recognize an air of authority when he felt it. â€Å"I am Skystrip Two,† he said, lifting his head higher, â€Å"an Elder of the Sacratorium. And your position, tribesman?† â€Å"We,† said Seldon, emphasizing the pronoun, â€Å"are scholars of Streeling University. I am a mathematician and my companion is a historian and we are here to study the ways of Mycogen.† â€Å"By whose authority?† â€Å"By that of Sunmaster Fourteen, who greeted us on our arrival.† Skystrip Two fell silent for a moment and then a small smile appeared on his face and he took on an air that was almost benign. He said, â€Å"The High Elder. I know him well.† â€Å"And so you should,† said Seldon blandly. â€Å"Is there anything else, Elder?† â€Å"Yes.† The Elder strove to regain the high ground. â€Å"Who was the man who was with you and who hurried away when I approached?† Seldon shook his head, â€Å"We never saw him before, Elder, and know nothing about him. We encountered him purely by accident and asked about the Sacratorium.† â€Å"What did you ask him?† â€Å"Two questions, Elder. We asked if that building was the Sacratorium and if tribespeople were allowed to enter it. He answered in the affirmative to the first question and in the negative to the second.† â€Å"Quite so. And what is your interest in the Sacratorium?† â€Å"Sir, we are here to study the ways of Mycogen and is not the Sacratorium the heart and brain of Mycogen?† â€Å"It is entirely ours and reserved for us.† â€Å"Even if an Elder-the High Elder-would arrange for permission in view of our scholarly function?† â€Å"Have you indeed the High Elder's permission?† Seldon hesitated the slightest moment while Dors's eyes lifted briefly to look at him sideways. He decided he could not carry off a lie of this magnitude. â€Å"No,† he said, â€Å"not yet.† â€Å"Or ever,† said the Elder. â€Å"You are here in Mycogen by authority, but even the highest authority cannot exert total control over the public. We value our Sacratorium and the populace can easily grow excited over the presence of a tribesperson anywhere in Mycogen but, most particularly, in the vicinity of the Sacratorium. It would take one excitable person to raise a cry of ‘Invasion!' and a peaceful crowd such as this one would be turned into one that would be thirsting to tear you apart. I mean that quite literally. For your own good, even if the High Elder has shown you kindness, leave. Now!† â€Å"But the Sacratorium-† said Seldon stubbornly, though Dors was pulling gently at his kirtle. â€Å"What is there in the Sacratorium that can possibly interest you?† said the Elder. â€Å"You see it now. There is nothing for you to see in the interior.† â€Å"There is the robot,† said Seldon. The Elder stared at Seldon in shocked surprise and then, bending to bring his lips close to Seldon's ear, whispered harshly, â€Å"Leave now or I will raise the cry of ‘Invasion!' myself. Nor, were it not for the High Elder, would I give you even this one chance to leave.† And Dors, with surprising strength, nearly pulled Seldon off his feet as she stepped hastily away, dragging him along until he caught his balance and stepped quickly after her. 54. It was over breakfast the next morning, not sooner, that Dors took up the subject-and in a way that Seldon found most wounding. She said, â€Å"Well, that was a pretty fiasco yesterday.† Seldon, who had honestly thought he had gotten away with it without comment, looked sullen. â€Å"What made it a fiasco?† â€Å"Driven out is what we were. And for what? What did we gain?† â€Å"Only the knowledge that there is a robot in there.† â€Å"Mycelium Seventy-Two said there wasn't.† â€Å"Of course he said that. He's a scholar-or thinks he is-and what he doesn't know about the Sacratorium would probably fill that library he goes to. You saw the Elder's reaction.† â€Å"I certainly did.† â€Å"He would not have reacted like that if there was no robot inside. He was horrified we knew.† â€Å"That's just your guess, Hari. And even if there was, we couldn't get in.† â€Å"We could certainly try. After breakfast, we go out and buy a sash for me, one of those obiahs. I put it on, keep my eyes devoutly downward, and walk right in.† â€Å"Skincap and all? They'll spot you in a microsecond.† â€Å"No, they won't. We'll go into the library where all the tribespeople data is kept. I'd like to see it anyway. From the library, which is a Sacratorium annex, I gather, there will probably be an entrance into the Sacratorium.† â€Å"Where you will be picked up at once.† â€Å"Not at all. You heard what Mycelium Seventy-Two had to say. Everyone keeps his eyes down and meditates on their great Lost World, Aurora. No one looks at anyone else. It would probably be a grievous breach of discipline to do so. Then I'll find the Elders' aerie-â€Å" â€Å"Just like that?† â€Å"At one point, Mycelium Seventy-Two said he would advise me not to try to get up into the Elders' aerie. Up. It must be somewhere in that tower of the Sacratorium, the central tower.† Dors shook her head. â€Å"I don't recall the man's exact words and I don't think you do either. That's a terribly weak foundation to- Wait.† She stopped suddenly and frowned. â€Å"Well?† said Seldon. â€Å"There is an archaic word ‘aerie' that means ‘a dwelling place on high.' â€Å" â€Å"Ah! There you are. You see, we've learned some vital things as the result of what you call a fiasco. And if I can find a living robot that's twenty thousand years old and if it can tell me-â€Å" â€Å"Suppose that such a thing exists, which passes belief, and that you find it, which is not very likely, how long do you think you will be able to talk to it before your presence is discovered?† â€Å"I don't know, but if I can prove it exists and if I can find it, then I'll think of some way to talk to it. It's too late for me to back out now under any circumstances. Hummin should have left me alone when I thought there was no way of achieving psychohistory. Now that it seems there may be, I won't let anything stop me-short of being killed.† â€Å"The Mycogenians may oblige, Hari, and you can't run that risk.† â€Å"Yes, I can. I'm going to try.† â€Å"No, Hari. I must look after you and I can't let you.† â€Å"You must let me. Finding a way to work out psychohistory is more important than my safety. My safety is only important because I may work out psychohistory. Prevent me from doing so and your task loses its meaning.-Think about it.† Hari felt himself infused with a renewed sense of purpose. Psychohistory-his nebulous theory that he had, such a short while ago, despaired ever of proving-loomed larger, more real. Now he had to believe that it was possible; he could feel it in his gut. The pieces seemed to be falling together and although he couldn't see the whole pattern yet, he was sure the Sacratorium would yield another piece to the puzzle. â€Å"Then I'll go in with you so I can pull you out, you idiot, when the time comes.† â€Å"Women can't enter.† â€Å"What makes me a woman? Only this gray kirtle. You can't see my breasts under it. I don't have a woman's style hairdo with the skincap on. I have the same washed, unmarked face a man has. The men here don't have stubble. All I need is a white kirtle and a sash and I can enter. Any Sister could do it if she wasn't held back by a taboo. I am not held back by one.† â€Å"You're held back by me. I won't let you. It's too dangerous.† â€Å"No more dangerous for me than for you.† â€Å"But I must take the risk.† â€Å"Then so must I. Why is your imperative greater than mine?† â€Å"Because-† Seldon paused in thought. â€Å"Just tell yourself this,† said Dors, her voice hard as rock. â€Å"I won't let you go there without me. If you try, I will knock you unconscious and tie you up. If you don't like that, then give up any thought of going alone.† Seldon hesitated and muttered darkly. He gave up the argument, at least for now. 55. The sky was almost cloudless, but it was a pale blue, as though wrapped in a high thin mist. That, thought Seldon, was a good touch, but suddenly he missed the sun itself. No one on Trantor saw the planet's sun unless he or she went Upperside and even then only when the natural cloud layer broke. Did native Trantorians miss the sun? Did they give it any thought? When one of them visited another world where a natural sun was in view, did he or she stare, half-blinded, at it with awe? Why, he wondered, did so many people spend their lives not trying to find answers to questions-not even thinking of questions to begin with? Was there anything more exciting in life than seeking answers? His glance shifted to ground level. The wide roadway was lined with low buildings, most of them shops. Numerous individual ground-cars moved in both directions, each hugging the right side. They seemed like a collection of antiques, but they were electrically driven and quite soundless. Seldon wondered if â€Å"antique† was always a word to sneer at. Could it be that silence made up for slowness? Was there any particular hurry to life, after all? There were a number of children on the walkways and Seldon's lips pressed together in annoyance. Clearly, an extended life span for the Mycogenians was impossible unless they were willing to indulge in infanticide. The children of both sexes (though it was hard to tell the boys from the girls) wore kirtles that came only a few inches below the knee, making the wild activity of childhood easier. The children also still had hair, reduced to an inch in length at most, but even so the older ones among them had hoods attached to their kirtles and wore them raised, hiding the top of the head altogether. It was as though they were getting old enough to make the hair seem a trifle obscene-or old enough to be wishing to hide it, in longing for the day of rite of passage when they were depilated. A thought occurred to Seldon. He said, â€Å"Dors, when you've been out shopping, who paid, you or the Raindrop women?† â€Å"I did of course. The Raindrops never produced a credit tile. But why should they? What was being bought was for us, not for them.† â€Å"But you have a Trantorian credit tile-a tribeswoman credit tile.† â€Å"Of course, Hari, but there was no problem. The people of Mycogen may keep their own culture and ways of thought and habits of life as they wish. They can destroy their cephalic hair and wear kirtles. Nevertheless, they must use the world's credits. If they don't, that would choke off commerce and no sensible person would want to do that. The credits nerve, Hari.† She held up her hand as though she was holding an invisible credit tile. â€Å"And they accepted your credit tile?† â€Å"Never a peep out of them. And never a word about my skincap. Credits sanitize everything.† â€Å"Well, that's good. So I can buy-â€Å" â€Å"No, I'll do the buying. Credits may sanitize everything, but they more easily sanitize a tribeswoman. They're so used to paying women little or no attention that they automatically pay me the same.-And here's the clothing store I've been using.† â€Å"I'll wait out here. Get me a nice red sash-one that looks impressive.† â€Å"Don't pretend you've forgotten our decision. I'll get two. And another white kirtle also†¦ to my measurements.† â€Å"Won't they think it odd that a woman would be buying a white kirtle?† â€Å"Of course not. They'll assume I'm buying it for a male companion who happens to be my size. Actually, I don't think they'll bother with any assumptions at all as long as my credit tile is good.† Seldon waited, half-expecting someone to come up and greet him as a tribesman or denounce him as one-more likely-but no one did. Those who passed him did so without a glance and even those who glanced in his direction moved on seemingly untouched. He was especially nervous about the gray kirtles-the women-walking by in pairs or, even worse, with a man. They were downtrodden, unnoticed, snubbed. How better to gain a brief notoriety than by shrieking at the sight of a tribesman? But even the women moved on. They're not expecting to see a tribesman, Seldon thought, so they don't see one. That, he decided, augured well for their forthcoming invasion of the Sacratorium. How much less would anyone expect to see tribespeople there and how much more effectively would they therefore fail to see them! He was in fairly good humor when Dors emerged. â€Å"You have everything?† â€Å"Absolutely.† â€Å"Then lets go back to the room, so you can change.† The white kirtle did not fit her quite as well as the gray one did. Obviously, she could not have tried it on or even the densest shopkeeper would have been struck with alarm. â€Å"How do I look, Hari?† she asked. â€Å"Exactly like a boy,† said Seldon. â€Å"Now let's try the sash†¦ or obiah. I had better get used to calling it that.† Dors, without her skincap, was shaking out her hair gratefully. She said sharply, â€Å"Don't put it on now. We're not going to parade through Mycogen with the sash on. The last thing we want to do is call attention to ourselves.† â€Å"No, no. I just want to see how it goes on.† â€Å"Well, not that one. This one is better quality and more elaborate.† â€Å"You're right, Dors. I've got to gather in what attention there is. I don't want them to detect you as a woman.† â€Å"I'm not thinking of that, Hari. I just want you to look pretty.† â€Å"A thousand thanks, but that's impossible, I suspect. Now, let's see, how does this work?† Together, Hari and Dors practiced putting their obiahs on and taking them off, over and over again, until they could do it in one fluid motion. Dors taught Hari how to do it, as she had seen a man doing it the day before at the Sacratorium. When Hari praised her for her acute observations, she blushed and said, â€Å"Its really nothing, Hari, just something I noticed.† Hari replied, â€Å"Then you're a genius for noticing.† Finally satisfied, they stood well apart, each surveying the other. Hari's obiah glittered, a bright red dragonlike design standing out against a paler field of similar hue. Dors's was a little less bold, had a simple thin line down the center, and was very light in color. â€Å"There,† she said, â€Å"just enough to show good taste.† She took it off. â€Å"Now,† said Seldon, â€Å"we fold it up and it goes into one of the inner pockets. I have my credit tile-Hummin's, really-and the key to this place in this one and here, on the other side, the Book.† â€Å"The Book? Should you be carrying it around?† â€Å"I must. I'm guessing that anyone going to the Sacratorium ought to have a copy of the Book with him. They may intone passages or have readings. If necessary, we'll share the Book and maybe no one will notice. Ready?† â€Å"I'll never be ready, but I'm going with you.† â€Å"It will be a tedious trip. Will you check my skincap and make sure no hair shows this time? And don't scratch your head.† â€Å"I won't. You look all right.† â€Å"So do you.† â€Å"You also look nervous.† And Seldon said wryly, â€Å"Guess why!† Dors reached out impulsively and squeezed Hari's hand, then drew back as if surprised at herself. Looking down, she straightened her white kirtle. Hari, himself a trifle surprised and peculiarly pleased, cleared his throat and said, â€Å"Okay, let's go.†

Chapter 01 Gitman

Part One Preparing to Invest Part One Includes Chapter 1Investment Environment Chapter 2Markets and Transactions Chapter 3Online Information and Investing Chapter 1 Investment Environment Outline Learning Goals I. Investments and the Investment Process A)Types of Investments 1. Securities or Property 2. Direct or Indirect 3. Debt, Equity, or Derivative Securities 4. Low or High Risk 5. Short or Long Term 6. Domestic or Foreign B)The Structure of the Investment Process 1. Participants in the Investment Process 2. Government 3. Business 4. Individuals 5.Types of Investors Concepts in Review II. Investment Vehicles A)Short Term Vehicles B)Common Stock C)Fixed Income Securities 1. Bonds 2. Preferred Stock 3. Convertible Securities D)Mutual Funds E)Derivative Securities 1. Options 2. Futures F)Other Popular Investment Vehicles Concepts in Review III. Making Investment Plans A)Steps in Investing 1. Meeting Investment Prerequisites 2. Establishing Investment Goals 3. Adopting an Investment Plan 4. Evaluating Investment Vehicles 5. Selecting Suitable Investments 6. Constructing a Diversified Portfolio 7. Managing the PortfolioB)Considering Personal Taxes 1. Basic Sources of Taxation 2. Types of Income a. Ordinary Income b. Capital Gains and Losses 3. Investments and Taxes 4. Tax-advantaged Retirement Vehicles C)Investing Over the Life Cycle D)Investing in Different Economic Environments 1. Stocks and the Business Cycle 2. Bonds and Interest Rates Concepts in Review IV. Meeting Liquidity Needs: Investing in Short-Term Securities A)Role of Short Term Securities 1. Interest on Short Term Securities 2. Risk Characteristics 3. Advantages and Disadvantages of Short Term InvestmentsB)Popular Short Term Investment Vehicles 1. Deposit Accounts 2. Federal Government Issues 3. Nongovernment Issues C)Investment Suitability Concepts in Review Summary Putting Your Investment Know-How to the Test Discussion Questions Problems Case Problems 1. 1Investments or Golf? 1. 2Preparing Caro lyn Bowen’s Investment Plan Excel with Spreadsheets OTIS—Online Trading and Investment Simulator Key Concepts 1. The meaning of the term investment and the implications it has for individual investors. 2. Review the factors used to differentiate between different types of investments. . The importance of and basic steps involved in the investment process. 4. Popular types of investment vehicles, including short term vehicles, common stock, and fixed income securities such as bonds, preferred stock, and convertibles. 5. Derivative securities such as options and futures, and mutual funds. 6. Other popular investment vehicles such as real estate, tangibles and tax advantaged investments. 7. Investment goals including income, major expenditures, retirement, and sheltering income from taxes. The latter includes analysis of tax-advantaged retirement vehicles. . Building a diversified portfolio consistent with investment goals. 9. Sources of taxation, types of taxable income , and the effect of taxes on the investor. 10. Developing an investment program that considers differing economic environments and life cycle stages. 11. The use of short term securities in meeting liquidity needs. 12. The merits and suitability of various popular short term investment vehicles including deposit accounts and money market securities. Overview This chapter provides an overview of the scope and content of the text. 1.The term investment is defined, and the alternative investment opportunities available to investors are classified by types. 2. An examination of the structure of the investment process is presented. This section explains how suppliers and demanders of investment funds are brought together in the marketplace. 3. The key participants in the investment process—government, business, and individuals—are described, as are institutional and individual investors. 4. Returns are defined as rewards for investing. Returns to an investor take two forms —current income and increased value of the investment over time.In this section the instructor need only define return, since there will be another opportunity to develop the concept of return in Chapter 4, however providing information about recent investment returns is always well-received by students. 5. Next, the following investment vehicles available to individual investors are discussed: short term vehicles, common stock, fixed income securities, mutual funds, real estate, tangibles, tax-advantaged investments, and options and futures. The text describes their risk return characteristics in a general way.The instructor may want to expand on the advantages and disadvantages of investing in each, although they will be treated in greater detail in subsequent chapters. It is vital for any investor to establish investment goals that are consistent with his or her overall financial objectives. 6. Once the investment goals have been well specified, the investor can adopt an i nvestment plan consistent with these goals, select suitable investments, build a diversified portfolio and manage it. 7. Personal taxes are discussed in terms of types of income and tax rates. The investment process is affected by current tax laws.Examples of tax shelters, especially tax-advantaged retirement vehicles, and tax planning are provided. 8. Once investment goals are established, it is important to understand how the investment process is affected by different economic environments. The chapter talks about types of investments—stocks, bonds, and tangibles—as they are affected by business cycles, interest rates, and inflation. 9. Liquidity is defined and short term securities that can be used to meet liquidity requirements are described. The discussion includes a look at short term interest rates and the risk characteristics of various short term securities. 0. The next section covers the various types of short term vehicles available to today’s invest or. There is enough detail about everything from passbook accounts to money market funds to commercial paper that the students should get a good grasp of the differences between the vehicles. Producing information on current rates helps bring realism into the classroom and enhances student perception of the lecturer as a knowledgeable instructor. Answers to Concepts in Review 1. An investment is any vehicle into which funds can be placed with the expectation of preserving or increasing value and earning a positive rate of return.An investment can be a security or a property. Individuals invest because an investment has the potential to preserve or increase value and to earn income. It is important to stress that this does not imply that an investment will in fact preserve value or earn income. Bad investments do exist. 2. (a)Securities and property are simply two classes of investments. Securities are investments, commonly evidenced by certificates, that represent a legal claim. Fo r example, a bond represents a legal claim on debt, and a stock represents a proportionate ownership in the firm.An option, on the other hand, represents the legal right to either buy or sell an asset at a predetermined price within a specified time period. Property constitutes investments in either real property (land and buildings) or tangible personal property (Rembrandt paintings, Ming vases, or antique cars). (b)With a direct investment, an individual acquires a direct claim on a security or property. For example, an investment in one share of IBM stock directly provides the stockholder a proportionate ownership in IBM. An indirect investment provides an indirect claim on a security or property.For example, if you bought one share of Fidelity Growth Fund (a mutual fund), you are in effect buying a portion of a portfolio of securities owned by the fund. Thus, you will have a claim on a fraction of an entire portfolio of securities. (c)An investment in debt represents funds loane d in exchange for the receipt of interest income and repayment of the loan at a given future date. The bond, a common debt instrument, pays specified interest over a specified time period, then repays the face value of the loan (Chapters 8 and 9 cover bonds in detail).An equity investment provides an investor an ongoing fractional ownership interest in a firm. The most common example is an investment in a company’s common stock. We will study equity instruments in greater detail in Chapters 5 through 7. Derivative securities are securities derived from debt or equity securities and structured to exhibit characteristics different from the underlying securities. Options are derivative securities that allow an investor to sell or buy another security or asset at a specific price over a given time period. For example, an investor might purchase an option to buy Company X stock for $50 within nine months. d)Short-term investments typically mature within one year while long-term in vestments have longer maturities, like common stock, which has no maturity at all. However, long-term investments can be used to satisfy short-term financial goals. 3. In finance, risk refers to the chance that the return from an investment will differ from its expected value. The broader the range of possible values (dispersion), the greater the risk of the investment. Low risk investments are those considered safe with respect to the return of funds invested and the receipt of a positive rate of return.High risk investments are those which have more uncertain future values and levels of earnings. 4. Foreign investments are investments in the debt, equity, derivative securities of foreign based companies and property in a foreign country. Both direct and indirect foreign investments provide investors more attractive returns or lower-risk investments compared to purely domestic investments. They are useful instruments to diversify a pure domestic portfolio. 5. The investment process brings together suppliers and demanders of funds. This may occur directly (as with property investments).Most often the investment process is aided by a financial institution (such as a bank, savings and loan, savings bank, credit union, insurance company, or pension fund) that channels funds to investments and/or a financial market (either the money market or the capital market) where transactions occur between suppliers and demanders of funds. 6. (a)The various levels of government (federal, state, and local) require more funds for projects and debt repayment than they receive in revenues. Thus, governments are net demanders of funds. Governments also demand funds when the timing of their revenues do not match their expenditure.The term net refers to the fact that, while governments both supply and demand funds in the investment process, on balance they demand more than they supply. (b)Businesses also are net demanders, requiring funds to cover short and long term operating needs . While business firms often supply funds, on balance they also demand more than they supply. (c)Individuals are the net suppliers of funds to the investment process. They put more funds into the investment process than they take out. Individuals play an important role in the investment process—supplying the funds needed to finance economic growth and development. 7.Institutional investors are investment professionals who are paid to manage other people’s money. They are employed by financial institutions like banks and insurance companies, by nonfinancial businesses, and by individuals. Individual investors manage their own personal funds in order to meet their financial goals. Generally, institutional investors tend to be more sophisticated because they handle much larger amounts of money and they tend to have a broader knowledge of the investment process and available investment techniques and vehicles. 8. Short term investment vehicles are those which usually have lives of less than one year.These vehicles may be used to â€Å"warehouse† temporarily idle funds while suitable long term vehicles are evaluated. Due to their safety and convenience, they are popular with those wishing to earn a return on temporarily idle funds or with the very conservative investor who may use these short term vehicles as a primary investment outlet. In addition to their â€Å"warehousing† function, short-term vehicles provide liquidity- they can be converted into cash quickly and with little or no loss in value. This characteristic is very useful when investors need to meet unexpected expenses or take advantage of attractive opportunities. . Common stock is an equity investment that represents a fractional ownership interest in a corporation. The return on a common stock investment derives from two sources: dividends, which are periodic payments made by the firm to its shareholders from current and past earnings, and capital gains, which result from selling the stock at a price above the original purchase price. Because common stock offers a broad range of return-risk combinations, it is one of the most popular investment vehicles. Two sources of potential return are dividends and capital gain. 10. a)Bonds are debt obligations of corporations or governments. A bondholder receives a known interest return, typically semiannually, plus the face value at maturity. Bonds are usually issued in $1,000 denominations, pay semiannual interest, and have twenty to forty year maturities. Bonds offer fixed/certain returns, if held till maturity. (b)Preferred stock is very much like common stock in that it represents an ownership interest in a corporation. But preferred stock pays only a fixed stated dividend, which has precedence over common stock dividends, and does not share in other earnings of the firm. c)A convertible security is a fixed income security, either a bond or preferred stock, that has a conversion feature. Typically, it can be converted into a specified number of shares of common stock. Convertible securities are quasi-derivative securities as their market value would depend on the price of the common stock and the conversion ratio. (d)A mutual fund is a company that invests in a large portfolio of securities; whereas a money market mutual fund is a mutual fund which solely invests in other short-term vehicles.Investors might find mutual funds appealing because a large portfolio may be more consistent with their investment goals in terms of risk and return. As we will see later, a mutual fund offers the investor the benefits of diversification and professional management. Mutual funds do not offer fixed/certain returns. Mutual funds are quasi-derivative securities as their market value would depend on the price of the assets that make up the fund’s portfolio. (e)Options are derivative securities that provides holders the right to buy or sell another security (typically stock) or property at a s pecified price over a given time period.Factors like the time until expiration, the underlying stock price behavior, and supply and demand conditions affect the returns. (f)Futures represent contractual arrangements in which a seller will deliver or a buyer will take delivery of a specified quantity of a commodity at a given price by a certain date. Unlike an option, which gives the investor the right to purchase or sell another security, futures contracts obligate the investor to deliver or take delivery. Factors affecting returns on commodity contracts include changes in government policy, unpredictable weather, trade embargoes, and so on. 1. Before developing and executing an investment program, an investor must ensure the following: (1)Necessities of life such as funds for housing, food, transportation, taxes etc are fully provided for. (2)Investor is adequately insured against the losses resulting from death, illness or disability, property etc. (3)Establish Retirement Goals Th e seven steps in investing are as follows: (1)Meeting Investment Prerequisites: Providing for Necessities of life, adequate protection against losses, and Setting retirement Goals as iscussed above (2)Establishing Investment Goals: Investment goals are the financial objectives that one wishes to achieve by investing. Common investment goals are: †¢Accumulating retirement funds †¢Enhancing current income through interest income and dividends †¢Savings for major expenditure like home, education etc. †¢Sheltering income from taxes (3)Adopting an Investment Plan: A written document describing how funds will be invested is an investment plan. The more specific the investment goal, the easier it will be to establish an investment plan consistent with your goals. 4)Evaluating Investment Vehicles: In this step, the measures of risk and return are used to estimate the perceived worth of an investment vehicle. This process is called valuation. (5)Selecting Suitable Investm ents: This step involves careful selection of investment vehicles that are consistent with established goals and offer acceptable levels of return, risk, and value. (6)Constructing a Diversified Portfolio: Diversification is the concept of forming a portfolio using different investment vehicles to reduce risk and increase return. This concept is central to constructing an effective portfolio. 7)Managing the Portfolio: Portfolio management involves monitoring the portfolio and restructuring it as dictated by the actual behavior of the investments. 12. Investment goals are the financial objectives you wish to achieve by investing in any of a wide range of investment vehicles. Common investment goals are: (a)Enhancing current income means choosing investment vehicles that regularly pay dividends and interest that can provide all or some of the money needed to meet living expenses. This is a common goal of retired persons and sometimes an important part of a normal family budget. b)Savi ng for major expenditures includes money set aside for such things as the down payment on a home, college tuition, and even an expensive vacation. The amount of money needed and the time period over which one can save will determine the amount set aside and, frequently, the investment vehicle employed. (c)The single most important reason for investing is to accumulate retirement funds. The amount that must be set aside is determined by the level of expected expenditures, expected income from social security and other sources, and the amount of interest expected to be earned on savings. d)Sheltering income from taxes involves taking advantage of certain tax provisions that permit reduction of the income reported to the government or direct reductions in taxes. Investments in certain assets, such as real estate, may be attractive due to their tax advantages. 13. Federal income taxes are charged against all income individuals receive from all sources (with the exception of interest rec eived on some bonds issued by state and local governments). (a)Active (ordinary â€Å"earned†) income is the broadest category and includes income from wages, salaries, bonuses, tips, pension income, and alimony.It is made up of income earned on the job as well as most other forms of non-investment income. (b)Portfolio (investment) income is earnings generated from various types of investment holdings. For the most part, it consists of interest, dividends, and capital gains earned on most types of investments. Passive income is a special category that consists of income derived chiefly from real estate, limited partnerships, and other forms of tax shelters. (c)Capital gains are the profits earned on the sale of capital assets—pleasure, or investment.They are measured by the amount by which the proceeds from the sale of the capital asset exceed its original purchase price. Currently capital gains are taxed at the same rate as ordinary income. Capital gains are appealing to investors because they are not taxed until they are actually realized. (d)A capital loss is the amount by which the proceeds from the sale of a capital asset are less than its original purchase price. Up to $3,000 of net losses can be applied against ordinary income in any one year, with the unused portion carried forward to offset future income. e)Due to the opportunities and challenges created by the tax laws, tax planning is an important part of the investment process. Tax planning involves looking at an individual’s current and projected earnings and developing strategies that will defer or minimize the level of his or her taxes. Tax plans involve current income, capital gains, or tax-sheltered investments. For example, one strategy is to take losses as they occur and to delay taking profits. One deducts the losses and delays inclusion of profits in order to minimize current taxable income. f)In general, tax-advantaged retirement plans allow individuals to defer taxes on the contribution and/or portfolio earnings until some future date when retirement withdrawals take place. There are employer-sponsored plans, such as 401(k) accounts and individual-created plans, such as Keogh plans, and individual retirement accounts (IRAs). 14. (a)Young investors, ages 20 to 45, tend to prefer growth-oriented investments that stress capital gains rather than income. These investors have little investable funds, and capital gains are seen as the quickest way to build up investment capital. b)By middle-age, ages 45 to 60, there is a consolidation taking place as family demands and responsibilities change. While growth-oriented securities are still used, investing becomes less speculative. Quality-growth vehicles are employed, and more attention is given to current income. The foundation is being set for retirement. (c)As the investor moves into the retirement years, age 60 on, preservation of capital and current income become the principal concerns. High-quality stocks and bonds and money market instruments are used as the investor’s objective is to live as comfortably as possible from the investment income.During retirement one tries to reap the rewards of a lifetime of saving and investing. 15. The four stages of the economic/market cycle are recovery, expansion, decline, and recession. Recovery is the strengthening of the economy after a recession. Expansion reflects continued strength and optimism about economic growth. Decline involves a slowing-down of the economy after an expansion which may have been moving too fast. Then the cycle moves into recession, the economy contracts and pessimism reigns. Just as things look the worst, the recovery cycle begins again. a)Stocks and equity-related securities (such as mutual funds and convertibles) are highly responsive to the economic cycle. During recovery and expansion stock prices are up. As the decline approaches, stock prices begin to decline as well. Growth-oriented and speculati ve stocks tend to do especially well in an expanding economy. (b)Bonds and other fixed-income securities are sensitive to movements in interest rates. Bond prices also move in the opposite direction of interest rate changes. This means that if interest rates are expected to rise, bond prices would fall, and bonds would not be a good place to hold investment funds.Interest rates generally shift with the economic cycle. Rates rise during normal recovery and fall during economic declines. 16. An asset is liquid if it can be converted to cash (sold) easily and quickly, with little or no loss in value. You would want to hold liquid assets as emergency funds or to accumulate funds for some specific purpose. IBM stock is not considered a liquid investment even though it can be easily sold. As with stocks in general, you can never be sure that, when funds are needed, you can quickly sell the stock without taking a loss. 17.Purchasing power risk for short-term investments occurs when the rat e of return on these investments falls short of the inflation rate. This generally happens to fixed-rate investments such as passbook savings accounts. Most other short-term investments have managed to provide rates of return about equal to the inflation rate when one looks at these short-term rates over long periods of time. Default (nonpayment) risk is very small with most short-term investments. The deposits in banks and other federally-insured savings institutions are protected up to $100,000 per account by agencies of the federal government. U. S.Treasury Bills are perfectly safe and sometimes called a risk-free investment. Commercial paper and repurchase agreements are extremely safe, based upon past experience, even though there have been rare instances of problems. These latter two instruments are also not insured. Money market mutual funds have also had an exceptionally safe history. Of course, the safest money market funds are those which invest solely in government securi ties and are virtually default-risk free. 18. Passbook savings accounts and NOW accounts (a checking account), offered by banks, generally pay a low rate of interest and have no minimum balance.Passbook savings and NOW accounts are primarily used by investors as savings accounts, providing the investor with a highly liquid pool of funds. MMDA’s are bank deposit accounts with limited check-writing privileges. Central asset accounts are comprehensive deposit accounts and combine checking, investing and borrowing activities. MMDAs and asset management accounts are more likely used by investors to earn a competitive short-term return while maintaining liquidity. Each type of account, except for asset management accounts, is insured. All but the passbook account typically require a minimum balance which varies. 19. a)Series EE savings bonds are accrual-type securities, which means that interest is paid when the bond is cashed, on or before maturity, rather than periodically over t he life of the bond. The purchase price of all denominations is 50% of the face value. The interest rate paid is variable. The higher the rate of interest being paid, the shorter the period of time it takes for the bond to accrue from its discounted purchase price to its face value (b)U. S. Treasury bills are short-term (less than one year) debt obligations of the federal government. T-bills are exempt from state and local income taxes, and federal taxes are deferred.They are regarded as the safest, but generally lowest-yielding of all investments, and, the secondary market for T-bills is highly liquid. (c)Certificates of deposits (CDs) are savings vehicles in which funds must remain on deposit for a specified period. Premature withdrawals incur interest penalties. Because of the requirement that they remain on deposit, CDs are less liquid than T-bills, but they are convenient to buy and hold, offer highly competitive returns, and have federal insurance protection. (d)Commercial pap er is unsecured short-term debt issued by corporations with very high credit standings.The secondary market for commercial paper is very limited and yields are comparable to yields on large-denomination CDs. Typically only larger institutions deal directly in this market because the denominations range from $25,000 to the more commonly issued $100,000. Commercial paper is not federally insured. (e)Banker’s acceptances are short-term credit arrangements between business firms and banks. Firms use banker’s acceptances to finance transactions, most often involving firms in foreign countries or firms with unknown credit capacities.Banker’s acceptances typically are denominated in $100,000 units, are low-risk securities, and have active secondary markets. Yields are slightly below CD yields and commercial paper, and above T-bills. (f)Money market mutual funds (MMMF) pool capital of many investors and invest it exclusively in high-yielding, short-term securities, such as T-bills, large CDs, commercial paper, and other similar securities. Because these high-yielding securities are in denominations of $10,000 to $1 million, the MMMF makes them available to individual investors.MMMFs are convenient, offer check writing privileges, and yields are based on the ability of the fund manager to invest in various short-term securities. Although they are not federally insured funds, their default risk is nearly zero because the securities they invest in are very low risk and the fund is relatively diversified. Suggested Answers to Investing in Action Questions Test Your Investment IQ (p. 4) How high is your Investment IQ as measured by the quiz? Answer: The average score was only 37 %, or well less than half. Remember that this is just one of many instruments that could be used to measure Investment IQ.For example, another assessment tool would be essay-oriented explanations of a specified investment’s strengths and weaknesses. Lessons For Investme nt Success (p. 15) (a)Why is it important to start investing now? Answer: One should start investing now in order to take advantage of compounding. A $1,000 amount invested for ten years at 7. 2 percent will double. The same amount invested at the same rate for twenty years will quadruple. Instead of just adding another $1000, you earn an extra $1000 from interest being earned on interest. Furthermore, there will never be an â€Å"ideal time† to invest.Terrorist threats, economic concerns, and alternative uses for the money are always with us. Studies have shown it is more important to invest than to pick the right security. Money not invested is likely to be spent and not provide future benefits. (b)Why is it a good idea to diversify? Answer: Diversifying allows you to spread out the risk that a unique firm or industry event will have a devastating impact on your investment. It is important to diversify across types of assets and nations. Suggested Answers to Discussion Que stions 1. a)Since you fall into the category of a young investor, your key investment goals should be to purchase a house and save for the education of your children. Appropriate investments should focus on the education of your children. (b)You should consider the effects of taxes when investing, especially the tax relative treatment of capital gains and dividends. Your focus should be on maximizing the after-tax return on your investments. (c)Since you have a relatively long investment horizon, it is appropriate to focus on higher-risk investments such as common stocks in your portfolio. . Short-term vehicles play an important part in your investment program. Most importantly they will provide a pool of reserves that can be used for emergencies such as replacing cars, appliances and clothing that wear out over time. Savings or Investment VehicleMinimum BalanceYieldFederal InsuranceMethod and Ease of Withdrawing Funds (a)Passbook savings accountNone0. 5% to $4. 0%, depending on eco nomyYes, up to $100,000 per depositIn person or through teller machines; very easy (b)NOW accountNo legal minimum, but often set at $500 or $1,000At or near passbook ratesYes, up to 100,000 per depositUnlimited check- writing privileges (c)Money market deposit account (MMDA)No legal minimum, but often set at $2,500Slightly above passbook ratesYes, up to $100,000 per depositLimited check- writing privileges (d)Asset management accountTypically $5,000 to $20,000Similar to MMDAsYes, up to $100,000 in banks, varies elsewhereLimited check- writing privileges (e)Series EE savings bondInitial deposit is 50% of face valueAbout two percent above passbook savings accountNo, but Federal government issuePenalty of 3 months interest for early withdrawal (f)U. S. Treasury ill$25Slightly above passbook and NOW accounts No, but Federal government issueSecondary market exists (g)Certificate of depositTailored to investor needsSlightly above asset management accountNo, but as secure as most bank savi ngs and checking accountsPenalty for early withdrawal (h)Money market mutual fundNo legal minimumSlightly below passbook savings accountNo, but has invested in a variety of government and bank issuesMay take a few days to receive check from fund Solutions to Problems 1. (a)Goal$250,000 $31,500 at 8% for 15 yrs. 100,000 Additional requirement$150,000 b)Annual deposit: ? ? $5,524. 50 2. (a)Tax on Allens’ income of $130,000. Looking at the joint tax return rate, we find ? (10% ? $14,000) ? [15% ? ($56,800 – $14,000] ? [25% ? ($114,650 – 56,800] ? [28% (130,000 – 114,650)] ? $1,400 ? [15% ? $42,800] ? [25% ? $57,850] ? [28% ? 15,350] ? $1,400 ? $6,420 ? $14,462. 50 ? $4,298 ? $ 26,580. 50 Tax on Zell’s income of $65,000. Looking at the joint tax return rate, we find ? ($10% ? $14,000) ? [$15% ? ($56,800 – $14,000)] ? [25% ? ($65,000 – $56,800)] ? $1,400 ? [15% ? $42,800] ? [25% ? $8,200] ? $1,400 ? $6,420 ? $2,050 ? 9,870. (b)Allan makes twice as much as Zell. Ratio of Allen’s total tax to income is ($26,580. 50/130,000) ? 20. 45% Ratio of Zell’s total tax to income is ($9,870450/65,000) $ ? 15. 18% Hence higher income earners pay a higher proportional of their income as tax. 3. (a)$50,000. 00/$50. 00 ? 1,000 shares of stock. (b)1,000 shares ? $2. 00 ? $2,000. 00 per year before tax. $2,000. 00 ? 0. 85 ? $1,700. 00 after tax. (c)($1,700. 00 ? 10) ? $50,000. 00 ? $67,000. 00. (d)$50,000. 00 ? 0. 05 ? $2,500. 00 per year before tax. $2,500. 00 ? 0. 67 ? $1,675. 00 after tax. (e)($1,675. 0 ? 10) ? $50,000. 00 ? $66,750. 00. (f)They should purchase the stock. Even though the annual interest from the bonds is more than the dividend income from the stock, after taxes the Pangs will have more money from the dividend income than from the interest income. 4. Cash FlowAmountRateTax (a)Interest$1,00028%$280 (b)Dividends$3,00015%$450 (c)LT Cap Gains$2,00015%$300 (d)ST Cap Gains$2,00028%$560 Solutions to Case Pro blems Case 1. 1? Investments or Golf? This case illustrates the many facets of the investment process; it involves much more than common stock.The authors recognize the value of physical education and emphasize the importance of sports, but a course in investments offers the student a lifetime of financial benefits. Thus, our arguments for selecting the investments course should not be interpreted as a negative statement on physical education, but rather as a positive discussion of the merits of investments. (a)The term investments refers to the process of identifying, evaluating, selecting, and monitoring the placement of funds with a view of preserving or increasing value and/or earning a positive return. Judd has simply identified one investment vehicle stock). He will not know how to evaluate other vehicles, select investments, or monitor them without a course in investments. In addition to looking at his own investments, a course in investing will give Judd a new perspective on the role of investments in the economy. He will learn that as an investor, he is actually supplying funds to government and business which will enable the continued strength and growth of the general economy. (b)Clearly, Judd has ignored short term securities, bonds, options, commodities and financial futures, mutual funds, real estate, tangibles, tax shelters, and limited partnerships.Each one of these vehicles offers another risk reward relationship that may meet certain unique investment requirements that cannot be met by common stock alone. (c)Judd does not have the knowledge needed to carry out the investment process described in question 2. Knowing about common stocks is not the same as understanding investments. There is no reason whatsoever to assume that common stock is the best investment available to Judd. Besides, the investment decision has to be compatible with his goals. Since Judd is just starting his career, in all probability he will not want to choose risky inves tments.Stocks are far riskier than, say, an investment in CDs. There are other considerations too. Does Judd have plans for the future when he will need the money? If so, is it a short term or a long term need? Answers to these questions will help determine whether he should make short term or long term investments. In summary, to gain an understanding of the investment decision and management process, Judd should pass up the golf course in favor of the investments course. Case 1. 2? Preparing Carolyn Bowen’s Investment Plan This case allows students to evaluate a proposed investment plan aimed at achieving certain retirement goals. a)The amount currently available to Carolyn includes $60,000 from the proceeds of the life insurance and $37,500 from her savings account, or a total of $97,500. At 6 percent compounded annually, her money will be worth: If she retires at age 62 (7-year investment): $97,500 1. 504 $146,640 ? $112,500 (house) ? $259,140 If she retires at age 65 ( 10-year investment): $97,500 ? 1. 791 $174,622. 50 ? $127,500 (house) ? $302,122. 50 (The future-value interest factors can be found in Appendix B, Table B. 1. ) (b)Value of Carolyn’s assets at 62 ? value of savings account ? alue of house: $146,640 ? $112,500 ? $259,140 Similarly, value of assets at 65 ? $174,622. 50 ? $127,500 ? $302,122. 50 Carolyn’s annual income at age 62 would be $259,140/12. 659 ? $20,470. 81 Carolyn’s annual income at age 65 would be $302,122. 50/11. 118 ? $27,174. 17 (c) Annual Retirement Income Age 62 RetirementAge 65 Retirement Annual S. S. & Pension Fund Benefits$16,308. 00$20,256. 00 ?Annuity Income20,470. 8127,174. 17 Total Annual Retirement Income$36,778. 81$47,430. 17 (d)Carolyn needs $45,000 per year (before taxes) of retirement income.Without considering the change in her tax status upon retirement, she will not satisfy this goal if she retires at age 62. At age 65 she meets her requirement. The nature of tax legislation and t he reduction in Carolyn’s tax liability upon retirement may make retirement at age 65 viable. (e)Carolyn’s plan is extremely conservative and low risk. The returns from the plan are very secure and probably assured. Carolyn can be confident that the accumulated worth of her investments will be available to her at retirement. Her plan to retire at age 65 meets her retirement -income goal. Carolyn’s plan offers low risk and low return..Through only a slight increase in risk, she might improve her return on investment and have more â€Å"cushion† to allow for inflation and unexpected expenditures. Carolyn could purchase highly rated bond, CDs, and other blue chip security investments. In this manner, her risk aversion would be satisfied, and she would earn a higher return on her investments. This should permit more likely achievement of her retirement-income objectives. Therefore, with very little increase in risk, Carolyn could invest her funds in vehicles that will increase the probability that she will meet or surpass her requirement of an annual retirement income of $45,000.