Financial Risk
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20/4. Family A and family B both consist of a father, mother, and two children of school age. In family A both spouses have jobs outside the home and earn a combined income of $100,000 per year. In family B, only one spouse works outside the home and earns $100,000 per year. How do the financial circumstances and decisions faced by the two families differ?
60/7. Suppose you invest in a real estate development deal. The total investment is $100,000. You invest $20,000 of your own money and borrow the other $80,000 from a bank. Who bears the risk of this venture and why?
Note: Please correspond the solutions with the questions.
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Solution Summary
The solution discusses how financial circumstances and decisions are faced by two families and how they differ.
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1. The financial circumstances differ between the families because Family A has two spouses working so while they have to worry about childcare and have to spend more money on that since no spouse is at home all the time, they are also dividing the risk of unemployment ...
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