(a)Investment planning (30 marks) (i) If Nurfarhana requires similar lifestyle post-retirement age and considering yearly inflation rate remains at 4%, by the age 55 she needs around RM7,148,000 to cover her expenses. Estimate whether her EPF savings will be sufficient to meet her current lifestyle post retirement? If insufficient, suggest on how she may achieve that amount. (Assuming the average life expectancy of Malaysian women is 73 years old, Nurfarhana receives no increment in her salary until retirement age and interest is compounded monthly, compute the future value of her EPF savings). (6 marks) (ii) How much should she invest each month and what strategies she may employ, assuming an 8% annual return on her portfolio to make up the shortfall from EPF? Firstly, compute whether she has adequate savings for emergencies. (14 marks) (iii) Considering that she neither has experience nor sufficient knowledge in investment, you may suggest to her investment in unit trust fund. Explain five (5) advantages of investing in unit trust fund. (10 marks) (b)Estate Planning (30 marks) (i) Since Nurfarhana is a Muslim, the issue of FARAID is relevant to her circumstances. Briefly define what FARAID means - you need only touch upon the subject in conceptual terms; there is no need to go into an excessive analysis of its application. (3 marks) (ii) Explain to Noriah what would happen to her properties should she ignored the need of writing a will. (2 marks) (iii) Nurfarhana writes a will and specifies that her non-muslim friend Melanie Chong is to inherit Nurfarhana's car. Melanie doesn't really need another vehicle, but she is deeply touched that Nurfarhana thought enough about their relationship to bequeath something so substantial to her. But, quite predictably, Nurfarhana's father Ahmad disputes that clause of Nurfarhana's will! What happens to Nurfarhana's bequest? (5 marks) (iv) Under Syariah law, only a portion of a deceased Muslim's estate may be disposed of through a will. What is that portion, in fractional terms? Under what specific circumstances may that proportion rise above that fractional ceiling? What does this mean in regard to Nurfarhana's wish to exclude her relatives from inheriting anything from her? If Nurfarhana insists on giving away her wealth to her friends not relatives, recommend what she can do about it. (10 marks) (v) List any 10 relatives entitled to Syariah distribution of the remainder of a Muslim's estate that is not distributed under a legally established, uncontested will: (10 marks)Case study 2: Enjoying being single Nurfarhana has come to see you at the urge of her best friend Chi Hui. Chi is a long-time satised customer of your fee- and commission-based nancial planning practice. Nurfarhana is 25, happily single, and earns a gross salary of RM6,000 a month as the creative manager of a leading KL-based advertising rm. She is immensely cosmopolitan and loves to spend her semi-annual vacations either in the US or the UK. In addition to being chic and sophisticated, Nurfarhana is immensely good at her job. So much so, her appreciative boss has told her she will receive a raise of RM2,00D a month, starting next month! In an exciting conversation with her best friend Chi, Nurfarhana discussed how she planned to lavishly spend her way through her impending RM8,00D a month gross salary. But halfway through that exchange, Nurfarhana let slip that she was a little apprehensive about her nancial future. Melanie seized the chance to recommend your excellent professional services in the area of holistic nancial planning for Malaysians. Two days later, Nurfarhana walked through the door of your ofce for the very rst time. Her striking looks complemented her elegant (undeniably expensive) taste in clothes and perfume. Nurfarhana ostensibly acts like there is no tomorrow! She lives in a condominium paying RM1,500 per month on rental, surrounded by expatriate neighbors who earn more than she does, yet who, mostly, spend less! She has no steady boyfriend, but seems more than satised with her long string of well- heeled admirers. Nurfarhana drives a one-year-old Toyota Altis that cost her RM80,000 when she bought it brand new, last year. She is now servicing about RMQOO of her monthly car installment with the remaining of 6 years installment. Recently, an even ashier model has caught her eye and she is beginning to contemplate selling off her present car. After that initial hour-long discussion, you also learned that Nurfarhana has no life insurance, very little in savings and believes in maintaining a rolling balance on her gold Visa. She currently owes RM8,DOO on it. In a typical month, she pays off about 5% of what she owes on her card. She deposits RM300 every month to father's bank account for his expenses living in Taiping, Perak. Her variable expenses amounting to RMSOD and spends around RMSDO for shopping and entertainment. In subsequent meetings, you learn these other key characteristics of her life: 1) Nurfarhana does not pay SOCSO. The only deductions at source on her gross salary are for tax (RMBOOJ, based on the Inland Revenue Board's (LHDN's) schedule of monthly deductions, and 11% of gross salary for employee's EPF. 2) Nurfarhana's company contributes 12% of gross salary for employer's EPF. You may assume a long-term future annual dividend rate of 6% from the Malaysian EPF. For projection purposes, use 4% pa. for ination. 3) Longterm rates of return for well-chosen direct stock investments can be assumed to range from 10% to 15%, with tremendous short- and mediumterm volatility. Long-term rates of return for equity unit trusts can be assumed to be 12% pa. BEFORE average annual expenses of 1.5%; to simplify calculations here, ignore the front-end load - however, be aware that the impact of loads must be taken into account in real-life client situations. Assume bond funds yield 5% pa. before average annual expenses of 0.75%; again, ignore the impact of possible loads. Assume Fixed Deposit rates average 4% over the next 20 years. 4) Nurfarhana has RM5,000 in her current account and RM2,000 in a xed deposit account. Her EPF balance is RMBODOO. Because she has never made any EPF withdrawals, Nurfarhana is under the mistaken belief that EPF will provide sufcient funds for her retirement. She plans to retire at 55. 5) Nurfarhana has no will but intends to write one soon, leaving all her worldly possessions to her friends and nothing to her numerous relatives who have shown nothing but disdain for her chosen way of life