Reference no: EM133058574
Part A:
"Many college students don't consider retirement plans or investment opportunities because they don't like to think that far into the future."With reference to the above statement, answer the following questions:
1. When is the ideal time to start thinking and accumulating funds for retirement?
2. Why is the topic of retirement planning becoming so important in this era?
3. Investment options that one can choose to accumulate wealth for retirement.
4. Various types of risks that one can face when planning for retirement.
Part B:Suppose you have $10,000 that you can use for retirement planning investment. A diversified portfolio to be made so you are able to invest the funds in the most optimal way. Assume that currently, you are 30 years of age.
Required:1. Clearly state the amount that you will be investing in each of the assets.
2. Estimate the future value of your portfolio when you turn 55, the retirement age.
At the end, comment on whether the portfolio you have just created above will be able to provide you with adequate income/wealth security or not post-retirement.
For (2):
- If you are investing in a savings account or a term deposit, select any Financial Institution of your choice and use their rates for necessary calculations.
- If you are investing in a property trust fund, you can assume a rate of return.
- If you are investing in the share market, select up to the 3 best companies to invest in and use their dividend, share price, and growth information for necessary calculations.
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Estimate the expected growth rate
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Project the expected standard deviation
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What is the price of the bond-general motors
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Tree procedure to project the expected npv
: Your management team has put together the following projections for a project that your company may be interested in implementing.
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Topic of retirement planning
: "Many college students don't consider retirement plans or investment opportunities because they don't like to think that far into the future."With reference to
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Calculate the current premium
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Identify the behavioural bias
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Calculating total return
: Tammy Jackson purchased 155 shares of All-American Manufacturing Company stock at $40.50 a share, One year later, she sold the stock for $45 a share
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Geometric average annual return
: Suppose you purchased one share of ABC at the end of 2017 for $55. At the end of 2018, you received a dividend of $2 and the price of the share was $52.
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