Loren Rathbone's Investment: The Flashing Red Light

內容大綱
In 2008, a retired farmer from Moose Jaw, Saskatchewan, was facing a challenging investment decision. He had recently met with a real estate investment representative about an opportunity near Edmonton, Alberta. The farmer understood land, but investing in real estate was new for him. The 11 per cent bond return that the representative enthusiastically described made the opportunity seem very appealing. On the other hand though, the farmer wondered if the return was too good to be true. On his farm equipment, a flashing red light usually meant something had gone wrong or was about to go wrong. Thinking about the investment, the farmer felt like a red warning light was flashing in his mind—something was not quite right. But perhaps his concern was unfounded. Should he make the investment?
學習目標
This case is appropriate for classes in personal finance, investment, and portfolio management at both undergraduate and graduate levels. It can be used as a tool for class discussion and is ideal for graded assessment. After completing the case, students should be able to<br><ul><li>understand the realistic return range for low-risk investments, well-established stable companies, and higher-risk opportunities;</li><li>differentiate between a one-sided sales pitch and unbiased information; and</li><li>deal with investment sales pressure, particularly when it is exerted by a friend or family member.</li></ul>
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