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QUESTION #1 (20 Marks; Maximum 5 marks for each...




QUESTION #1 (20 Marks; Maximum 5 marks for each scenario) REQUIRED: For EACH of the 4 scenarios described below provide the following information: I) the appropriate investment portfolio asset allocation that you would recommend (i.e. what percentage would you put into Cash, Fixed Income and Equity) (2 Mark maximum for each scenario); II) the types of investments within each asset class (i.e. for the Fixed Income category; would you recommend GIC?s Bonds, Treasury Bills, etc.) (2 Mark maximum for each scenario); III) your detailed rational for your recommendation (1 Mark maximum for each scenario). Scenario #1: Single individual aged 28; No financial dependents; Graduated from York U. Business Program 6 years ago and recently completed his CFP designation. He has been working as an Assistant Finance Manager at TD Bank for 4 years. Positive cash flow of $400 per month; No student loans or other debt. Recently inherited a house and $200,000 in cash. Scenario #2: Parents (age 35) of three minor children, all under the age of 10; Expecting their 4th child; Renting an expensive but small, 2 bedroom apartment; Positive cash flow of $500 per month; Investments of $80,000 in their non-registered investment account and $30,000 in a RESP account. Scenario #3: Senior couple (both aged 75 years old); No financial dependents; Renting their apartment; Only investment is a $100,000, 30 day term deposit (earning 1 ?% interest) in a non-registered investment account. The term deposit is maturing this week; Negative monthly cash flow of $700 per month; Only income for both is their Old Age Security (OAS) and Canada Pension Plan (CPP). Scenario #4 A married, working couple who will both retire within 5 years at age 65; No children; $20,000 in cash in their chequing account, $150,000 in non-registered investment account (all GICs) and $300,000 in total in their RRSP accounts Upon retirement in 5 years, they will receive OAS, CPP and $5,500 in total from their private/employer pension plans; They expect to have a significant positive cash flow in retirement; At age 71, they are required to convert the RRSP to RRIF?s and to begin RRIF withdrawals at age 72, which will increase the positive cash flow; Both are healthy and expect to live until age 90; Their Wills indicate that they intend to leave all of their assets to their favourite charity when they die. QUESTION #6 (12 Marks) This question relates to the Canada Deposit Insurance Corporation (CDIC). REQUIRED: Answer the following questions: (a)What is the purpose of this organization? (2 Marks) (b)What investments are covered (insured) under this Act? (2 Marks) (c)What is excluded from this insurance? (4 Marks, 1 mark each) (d)Explain the CDIC coverage for the following scenario (4 Marks; 1 Mark each): Your client has the following joint deposits at a CDIC member institution: (1)Eligible deposits worth $75,000 held with a spouse; (2)Eligible deposits worth $75,000 held with a spouse and a minor child; (3)Eligible deposits worth $125,000 held with two business partners; (4)A term deposit that matures in 2 years (2014), originally purchased in 2004.,I have ever submitted another assignment. This is the second assignment. I want the answer more sepecific and detail following the instructions.,I have spent total $210 on coursehero because I trust coursehero. So please make sure my assignment quality. Take a little more time. Thank you.,i want you to add something to my question1: investment objective 1. long term investment or 2. mid term investment 3. short term investment objective: 1. safety of principal ?conservative, short term? 2. liquidity ?conservative, short term? 3. income/cash flow ?balanced, mid term or long term? 4. growrh ?higher risk, longer term? i want to add it on first requirement.,You mean that I need to create a post(that need additional money)? But it is on the same questions. I just want to add investment objective into the portfolio. objective: 1. safety of principal ?conservative, short term? 2. liquidity ?conservative, short term? 3. income/cash flow ?balanced, mid term or long term? 4. growrh ?higher risk, longer term?


Paper#7177 | Written in 18-Jul-2015

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