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Cash management plan for the Helms

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Please see the attached word file for the data and answer the following questions (attached excel file is the calculation with the data):

1. Do you feel the Helms' $8000 liquid balance is adequate? Explain.
2. Explain the relative risks and potential advantages of CDs. Explain under what condition(s) you would recommend them for the Helms.
3. Do you agree with Phil that some of their funds should be invested in the stock market? Explain.
4. What are your recommendations for a cash management plan for the Helms?

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This discusses the cash management plan for the Helms

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1. Do you feel the Helms' $8000 liquid balance is adequate? Explain.
One has to see the foreseeable bulk expenses, which prevents them from saving or which may force them to liquidate their existing portfolio. Liquid balance is required to meet their contingencies or any bulk expenses as normal expenses they are meeting from their pay. Let us evaluate their family profile, Marcia and Phil Helm, a couple in their thirties, have been married for several years. They have no children, and each has a professional career. As both are working and they have no children they will have less liquidity requirements. Given the circumstance it is adequate. But in future they should make a target growth rate of increasing it every year 10% as they are aging.

2. Explain the relative risks and potential advantages of CDs. Explain under what condition(s) you would recommend them for the Helms.
Certificate of Deposits: These are short - to-medium-term interest bearing, debt instruments offered by banks. These are low-risk instruments. There is usually an early withdrawal penalty.
I would recommend it under the condition that they don't have any short-term requirement because there is early withdrawal penalty in it. Moreover if they are willing to wait for long term maturity than only they should opt for it.

3. Do you agree with Phil that some of their funds should be invested in the stock market? Explain.
The investment options before one are many. Pick the right investment tool based on the risk profile, circumstance, time zone available etc. If ...

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