Elena, date of birth (01/01/1979) has a marginal tax rate of 47% p.a. (including Medicare Levy), she is assessed as a Growth (80% Aggressive, 20% Defensive) investor and plans to retire in 25 years time. She receives an inheritance of $300,000 from her mother and is seeking your advice on whether to invest in: a. A Growth based managed fund, in her name, returning 12% each year for the duration of the term of the investment; OR b. Set up a new superannuation account and deposit these funds as a non-concessional contribution. Invest in a Growth based managed fund earning 9% each year for the duration of the term of the investment.

Assumptions There are no further deposits or contributions Annual compounding The interest rate you use in each calculation needs to be net of the applicable tax rate for each of the two options. Start date for purposes of calculation is 01/01/2020 Based solely on the information above, when Elena retires: Questions: 3.1 What is the balance in Option A? (4 marks) 3.2 What is the balance in Option B? (4 marks) 3.3 Provide one (1) advantage and one (1) disadvantage of each of these two options (4 marks) 3.4 Elena also mentions to you that her friend has advised her to invest this inheritance in gold, as she believes it will appreciate in value, given the current state of the global economy. Elena is considering whether to pursue this by purchasing physical gold or purchasing an Exchanged Traded Fund (ETF) tracking the spot price of physical gold. Provide a short critical analysis (using bullet points) of investing in each of these two options and based on this, if the investment choice was purely restricted to one of these two options, why would you recommend? (3 marks)