An insurer guarantees an annual income stream of RM12,000 per annum for 25 years. The amount is payable to Jessie or her beneficiary. Using 4% as the discount rate, what should be a fair purchase price to Mandy if the annual income payable to Jessie were to start one year from the date of purchase?

Select one:

a. RM187,465

b. RM197,465

c. RM204,964

d. RM194,964

Which of the following is NOT one of the benefits of the PRS?

Select one:

a. A transparent investment vehicle

b. Reduce the burden on Government finances

c. Additional source of short term capital

d. Provides a pool of funds to fund retirees during retirement

Fendy has a personal net worth of RM2 million. He formed a sole proprietorship and injected RM100,000 as capital. The sole proprietorship incurred a loss of RM200,000 after 3 years. The creditor of the sole proprietorship ____________

Select one:

a. Has no further claim against Fendy because the capital for business was only RM100,000

b. Can claim against Fendy up to 50% of debt owing by the sole proprietorship

c. Can claim against Fendy only if he signed a letter of guarantee for the amount owing

d. Can claim against Fendy until the full settlement by Fendy or the sole proprietorship

Controlling stake can be an issue to a business owner planning for retirement. Which of these statements is NOT CORRECT?

Select one:

a. Giving the successor a life-time gift via a stake in the business is common in business succession

b. Use a living trust as a way of passing control of the business can ensure that he receives income from the business throughout retirement years

c. Selling and controlling stake to the successor requires consideration as to whether the potential successor can afford the price

d. With-holding giving away a controlling stake of the business until death is also an option for the business owner