Whаt wаs the primаry significance оf the Supreme Cоurt case Marbury v. Madisоn (1803)?
Lucky Luke, 40, аnd his wife Hоlly, 39, аre cоnsidering whаt tо do with a recent windfall they received after the untimely death of Holly's mother. The windfall is estimated to be $2,500,000 (after taxes). Luke is currently a supervising mechanic at a local luxury car dealership and has a salary of $48,750 annually. Holly is, and always has been, a stay-at-home mom. They have two children, Lenny, 12, and Buford, 10. By design, the Lukes owe no debt and pay their expenses on a monthly basis. Family expenses last year amounted to approximately $150,000. In addition to the inheritance they will receive, the Lukes have an additional $1,250,000 in savings Luke and Holly have approached a wealth management firm for assistance in managing their portfolio. The Lukes made the following statements at a recent client discovery meeting: · 'One of our goals at this stage in our lives is to pay for the college education of our children. We would like both of them to go to Holly's alma mater, which is a prestigious liberal arts institution." · "We expect our annual expenses to increase at the general rate of inflation of 2%” · "We want to retire at 65 and be able to live comfortably, but not extravagantly." · "We are taxed at 25% on both income and capital gains. · "We believe our portfolio should never suffer an annual loss of more than 5%. In addition, we do not want to invest in any individual investment or security that is too risky. · "We do not foresee any unusual expenses over the short term. As always, we would like to have enough cash on hand for emergencies. Determine the Lukes' willingness and ability to tolerate risk, their overall risk tolerance, and their required return for the next year. Determine the Lukes' time horizon, liquidity needs, and legal, regulatory and tax considerations. 1-Risk tolerance (Circle each) (2 Marks) Ability: Below/ above average. Willingness: Below/ above average. Overall: Below/ above average Discussion:2- Return (calculate the required after-tax nominal rate of return) (6Marks)3-Time horizon (2 marks) Ans: Discussion:4-Liquiduty (2 marks) Ans: Discussion:5-Legal/regulatory (1 mark) Ans: Discussion:6-Taxes (2Marks) Ans: Discussion: 7-Unique Circumstances (1 Mark) Ans: