Jim is 24 and earns $62,000 a year. He wishes to invest for his newborn daughter's college education, which is 18 years away. Inflation is currently running at 4.1%, while real interest rates are rising.

Elizabeth is 63 years old and earns $137,000 a year. She wishes to invest for retirement, which is four years away. Inflation is currently running at 1.1%, while real interest rates are falling.

Select the best answer from the choices provided.
Jim is better positioned to invest in bonds because he makes less and has longer before his investment matures.
Jim is better positioned to invest in bonds because inflation is high.
Elizabeth is better positioned to invest in bonds because she has less time before her investment matures.
Elizabeth is better positioned to invest in bonds because real interest rates are falling.

Question

Jim is 24 and earns $62,000 a year. He wishes to invest for his newborn daughter's college education, which is 18 years away. Inflation is currently running at 4.1%, while real interest rates are rising.

Elizabeth is 63 years old and earns $137,000 a year. She wishes to invest for retirement, which is four years away. Inflation is currently running at 1.1%, while real interest rates are falling.

Select the best answer from the choices provided.
Jim is better positioned to invest in bonds because he makes less and has longer before his investment matures.
Jim is better positioned to invest in bonds because inflation is high.
Elizabeth is better positioned to invest in bonds because she has less time before her investment matures.
Elizabeth is better positioned to invest in bonds because real interest rates are falling.