0 of 12 Questions completed
Questions:
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading…
You must sign in or sign up to start the quiz.
You must first complete the following:
0 of 12 Questions answered correctly
Your time:
Time has elapsed
Case Study – 1: Vikram Aditya, aged 40, has the following goals ahead of him.
(1) Son’s post-graduate education: Due in Year 5. Current cost Rs. 11,00,000 p.a. to be incurred at the end of each year for 2 years. Likely Inflation 10% p.a.
(2) Daughter’s marriage: Scheduled at the end of Year 8. Current cost Rs. 1,50,00,000. Inflation is assumed to be at 10% p.a. Vikram Aditya has annual expenses of Rs. 400,000 and will retire at 60. Life Expectancy is 75. The inflation of expenses is 5%. The yield after retirement will be 8%. Assume the amount set apart will earn 5% interest.
Question 1: How much money will need to be set apart from the corpus at the end of Year 5, to finance the son’s post-graduate education?
Question 2: What is the likely outflow on account of daughter’s marriage in the year it is planned?
Question 3: How much retirement corpus is needed for Vikram Aditya at the time of retirement?
Question 4: What is the annual investment required at the beginning of the year for achieving the retirement corpus if the rate of return in the accumulation phase is 11%?
Case Study 2: Mr. Y, aged 40, has the following goals ahead of him.
(1) Son’s post-graduate education: Due in Year 5. Current cost Rs. 15,00,000 p.a. to be incurred at the end of each year for 2 years. Likely inflation @15% p.a.
(2) Daughter’s marriage: Scheduled at the end of Year 7. Current cost Rs. 1,00,00,000. Inflation is assumed to be at 10% p.a.
Mr. Y has provided a corpus of Rs. 2,00,00,000 towards these two needs. The corpus is invested in a mix of debt and equity yielding 8% p.a. Ignore taxation.
Question 1: How much money will need to be set apart from the corpus at the end of Year 5, to finance the son’s post-graduate education? Assume the amount set apart will earn 6% interest.
Question 2: What is the likely outflow on account of daughter’s marriage in the year it is planned?
Question 3: How much will be left in the corpus after both goals are fulfilled (assume that he does not set apart money) in the 6% corpus mentioned in Q.1?
Question 4: How would you describe the investment policy Mr. Y is using for the corpus?
Case Study-3: Mr. Kashi (60) has just retired from service. He is entitled to a pension of Rs. 5,00,000/- p.a. received yearly in advance. The pension adjusts partially with inflation to the extent of 50%. Mr. Kashi’s wife (Mrs. Kashi-57 years) is entitled to the pension for her lifetime in case of the demise of Mr. Smart before her or will continue till the last survivor.
Nobody else is dependent on the couple. The couple stays in their own home. Mr. Smart received Rs. 50 lakhs (after tax) as retirement dues. Their current living expenses are Rs. 600,000 per annum.
Mr. Kashi’s employer will continue to provide a family floater mediclaim policy for both of their lifetime that is considered adequate for their needs. Inflation is to be assumed at 6% p.a. Life expectancy is to be assumed to be 85 years for Mr. Kashi and 80 years for Mrs. Kashi. The couple wants to make provision for expenses on social occasions that arise & leisure travel expenditure to the tune of Rs. 50,000 p.a. (inflation 6% p.a.) apart from compensating for the inflation adjustment shortfall in the pension income. Assume the expenditure arises at the beginning of each year. The couple seek your advice.
Question 1 : If discounted @ 7% p.a. and assuming that the adjustment is fully required at the beginning of the year, the inflation adjustment required is ____.
Question 2: The amount required for compensating the difference required for inflation adjustment based on a discounting rate of 7% is higher than the corpus of Rs. 50 lakhs available with them. This means that:
Question 3: If old aged couple is looking for fixed monthly pension, what among government scheme they can choose?
Question 4: The couple wants to know the features of the Senior Citizen Savings’ scheme. What is true regarding it?
Content of the portal is the sole property of Institute for Financial Literacy,
Any commercial use of the content will lead to legal action against such person or institution as per the laws.
Copyright © 2021 Infily India. All rights reserved