Advise on the main asset classes available in Zambia clearly showing the common investment time horizon for each. What is the most money you could make over the next year?
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Mr. New Retiree is about to retire after an illustrious career in the Zambian civil service. He is expecting to receive a net of K2.5 million in retirement benefits. As an Investment Advisor, you have been approached by Mr. New Retiree to advise on the options available for him to consider.
- Advise on the main asset classes available in Zambia clearly showing the common investment time horizon for each.
- What is the most money you could make over the next year?
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- a) As an investment advisor, you have been approached by a client called Mr. Sobolo, who wants some help in investment-related matters.Mr. Sobolo is currently 45 years old and has Gh₵600,000 in the bank. He plans to work for 15 more years and retire at the age of 60. Mr. Sobolo's present salary is Gh₵ 400,000 per year. He expects his salary to increase at the rate of 12 per cent per year until his retirement.Mr. Sobolo has decided to invest his bank balance and future savings in a portfolio in which stocks and bonds would be equally weighted. For the sake of simplicity, assume that these proportions will be maintained by him throughout. He also believes that bonds would provide a return of 7 per cent and stocks a return of 13 per cent. You concur with his assessment.Once Mr. Sobolo retires at the age of 60 he would like to withdraw Gh₵500,000 per year from his investments for the following 15 years as he expects to live up to the age of 75 years. He also wants to bequeath Gh₵ 1,000,000…Mr. Abdullah is planning to invest $ 100,000 and looking for a good investment opportunity. that will maximize the return with minimum time. Following options are available for him. Calculate and analysis the return from each investment option and advise him by considering the Rate of return and time value of money. Option 1 Deposit $100,000 in an account earning 12% simple interest for 6 years Option 2 Deposit $100,000 in an account earning 7% compound interest for 4 years Option 3 Deposit $100,000 in an account earning 14% simple interest for 3 years Option 4 Deposit $100,000 in an account earning 5% compound interest for 6 yearsYou just had your 30th birthday and you are planning for your retirement at age 66. You currently have $20,000 in your investment portfolio, and you estimate that you will need at least $1.5 million in order to retire comfortably when you turn 66. What rate of return must be earned on your investment portfolio (assuming that you do not add any more money into the account) for your retirement plan to work? Show me all the calculation process
- Your client, Tom, has come to you inquiring about retirement. He wants to know approximately how much (in future dollars) he will need to have saved by retirement. You have calculated that he will need about $182,365 a year to maintain his current life style. He expects to retire at age 64 and live to around 90, and his return on investment averages at 9%. Estimated average inflation is 3%. How much does Tom need to have on day 1 of retirement to meet this goal? O $1,987,422 O $2,127,937 O $2,662,389 O $2,552,8151. Your client is 40 years old; and she wants to begin saving for her retirement, with the firs payment to come one year from now. She can save Rs. 5000 per year and to invest it in the stock market., which expect to provide average return of 9% in the future. a) If she follows your advice, how much money she will have at the age of 65? b) How much she will have at the age of 70? c) She expects to live for 20 years if she retires at 65 and for 15 years if she retires at the age of 70. If her investment continues to earn the same rate of return, how much will she be able to withdraw at the end of each year after retirement at each retirement age? you advise herUse Excel to solve the following problem. Assume that you are 39 years old planning for your future retirement at age 65. You think that you will be comfortable living on the proceeds from a $1,000,000 401K Retirement Account.a. If your investments grow at an average rate of 6% annually how much must you invest monthly to achieve your projected retirement fund total by the time you retire in 26 years?b. Assuming that when you do retire, you will re-direct your $1,000,000 investment portfolio into less volatile and more secure mutual funds. You expect that, invested in these sources, your portfolio will securely earn 4.5% annually. Based on your assumptions and the normal life expectancy of an American male or female (I determined this to be 81 years old), without consuming any of your principal, how much money will you have on a monthly basis to support your life?(I have worked this problem out on my own, I just want to be sure I applied the formulas and concepts correctly.)
- After completing a long and successful career as senior vice president for a large bank, you arepreparing for retirement. After visiting the human resources office, you have found that you haveseveral retirement options: (1) you can receive an immediate cash payment of $1 million, (2) youcan receive $60,000 per year for life (your remaining life expectancy is 20 years), or (3) you canreceive $50,000 per year for 10 years and then $70,000 per year for life (this option is intended togive you some protection against inflation). You have determined that you can earn 8 percent onyour investments. Which option do you prefer and why?Your client is 40 years old; and she wants to begin saving for her retirement, with the firs payment to come one year from now. She can save Rs. 5000 per year and you advise her to invest it in the stock market., which expect to provide average return of 9% in the future.a) If she follows your advice, how much money she will have at the age of 65?b) How much she will have at the age of 70?c) She expects to live for 20 years if she retires at 65 and for 15 years if she retires at the age of 70. If her investment continues to earn the same rate of return, how much will she be able to withdraw at the end of each year after retirement at each retirement age?After completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 30 years from now. So, you are thinking about creating a fund that will allow you to receive $40,000 at the end of each year for 25 years after your retirement. The interest rates are expected to be 2.25% per annum during the 30year pre- retirement period and 1.75% during the retirement period. Required: a) To provide the 25- year, $40,000 a year annuity, calculate how much should be in the fund account when you retire in 30 years. b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 2.35% per year during the 30 years preceding your retirement?c) What effect would a change (increase/decrease) in the interest rates, both during and prior to retirement, have on the values calculated in parts (a) and (b)? Explain why. d) (Using different interest rates) Assume that the…
- You have heard about the impending retirement crisis facing the global community and you want to take action so you don't become a victim of this crisis. You have decided to start contributing a constant amount of $380 into your retirement account every month, beginning one month from today. You plan to keep making that same monthly contribution for 40 years and then you will retire. If your investments earn a rate of return of 7.74 percent, how much do you expect to be in your retirement account the day you retire? $1,420,649 $1,230,765 $997,472 $1,103,344You are thinking about buying a real estate property. If you buy the property, you think you will sell it for $829826 in 13 years. If your required return on investments of this risk is 16.17%, what is the most that you should be willing to pay for the property? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate.After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you found that you have several retirement options to choose from: An immediate cash payment of $1.11 million. Payment of $53,000 per year for life. Payment of $43,000 per year for the first 3 years and then $63,000 per year for the remainder of your life (this option is intended to give you some protection against inflation). You believe you can earn 7 percent on your investments, and your remaining life expectancy is 6 years. Required: Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Determine which option you prefer.