Question

You are Stephen, an investment banker at Goldmen, Inc.. You work long hours but make $2...

You are Stephen, an investment banker at Goldmen, Inc.. You work long hours but make $2 - $3 million a year. That does not include your annual bonus, a percentage of the money you bring into the company. Last year your bonus was $17 million. The year before it was $22 million. You enjoy your lifestyle: the private jet, the beautiful women/men, the finest vacations. Now you’ve met the love of your life, Jackie Onassis. You thought you were rich! Jackie is rich beyond your wildest imagination and you are having a hard time keeping up. You need more money, quickly. How do you do it? Nothing illegal. You create a new investment product for all your wealthy clients: bundled bonds issued by American cities, the backbone of the USA. People are happy to invest in the country and your product “flies off the shelves” and you are making a ton of $$. But you want a sure thing. What if the bonds fail? To protect yourself from that, you “short” the bonds, meaning you bet against their success. If they fail, you win. Now you’ve protected yourself if the investments succeed and if they fail. And the best part it, even if Goldmen were to lose money, the US government will bail the company out because it is “too big to fail.”

What would you do? Consider all options (pros and cons) and explain your reasoning.

Homework Answers

Answer #1

Ensuring our income are changeless and doesn't stop if any issue emerges is a smart thought however the need for more cash may cause us to go in an inappropriate way. So as to arrive at the desires for our profoundly rich accomplice we can't put ourselves in question.

We have to offer significance to the work we do and profit would definately come our direction. In desparation to accomplish something significant , we should not accomplish something hazardous which may keep our entire profit till not in danger . So we need keep up the endeavors and consistently attempt to put forth a valiant effort yet in a protected and arranged way.

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