Introduction Client: A middle-aged widow mother with two teenage sons Personal Background Mary Ma Age Nationality Occupation Employment history Monthly salary Non-smoker 43 Chinese Assistant branch manager Local fast food chain for 5 years $30,000 (net after employee's MPF contribution) PLUS one month's salary as bonus Mrs. Ma's husband died 18 months ago in a traffic accident, leaving her and their two teenage sons. As the related court case has recently concluded, Mrs. Ma will receive $1.2 million in compensation for her husband's death next week. Danny, their elder son, is in Form 6 and plans to go to a local university. Gary, the younger son, is in Form 4 and wishes to go to university in UK. Currently, Mrs. Ma hired a domestic helper to look after her family. Other Information Investments Mr. Ma left behind an investment portfolio of $1.67 million. Since Mrs. Ma has no experience with investments, it has been untouched since Mr. Ma's death. Mrs. Ma is apprehensive about making investments because her family has suffered some losses due to fluctuations in the market over the Table 4 - Economic Information and key Assumptions years. Because she has a busy schedule, she thinks it will be too stressful for her to manage an investment portfolia as well. Female: 87 Insurance Mrs. Mu bas already applied the death benefits from Mr. Ma's term life insurance to fully pay off the mortgage on the farnily home. In terms of insurance, all she owns is a home ownership insurance policy covering the contents in her home Avere life expectancy Expected average inflation Post-retirement investment return Discount rate MPF retum rute Education fees for local university Education fees for university in UK Expected retirement expenses 3% pa 5% pa. 6% 3.5% p... $50,000 per yeur Retirement Mrs. Ma wishes to work for her company until she is 65 yeurs old and then she will retire. 32,000 per year (including living fee) $15,000 per month in today's dollar Please also see the Appendix for further details in relation to the above. Table 5 - Investment Portfolio of Mary Ma Appendix Table 1 - Annual Consumption of Mary Ma and her 2 sons for the Year ended 31 March 2020 Stock Portfolio Banking (Hong Kong) Property & Construction Banking (Mainland China) Oil, Gas, Mining & Chemicals Tracker Fund Shipping Telecommunications Total Bcta 0.438 1.224 1.037 1.167 0.997 0.798 0.303 Quantity 2,000 5.000 5.000 12.000 10.000 5,000 5,000 Current Price $140.50 112.50 5.05 11.25 24.35 79.80 4.78 Total Value S281,000 562.500 25,250 135,000 243.500 399,000 23.900 $1.670.150 Consumption Items General household expenses Utilities Telephone Food Transportation Entertainment Children's education Insurance premium (home contents) Domestic helper MPF contribution Others Total S 24.000 21,600 10.200 86,400 36,000 12,000 42,000 5,400 48,000 12,000 6,000 303,600 Table 2 - Balance Sheet of Mary Maus of 31 March 2020 Required: Mrs. Ma wishes to know her current financial position. You are required to prepare a general financial analysis and help her to determine ber immediate objective with justification You are required to write her a memo to address the above issues. Marking rubrics The memo is expected to include as follows: Marks Format S Introduction section 5 Financial analysis and comment 15 Determination of objective 10 Closing section S S 13,830 Assets Cush and savings accounts Financial investment MPF account balance Family home Personal belongings Total wssets 125,000 Liabilities 670,150 Credit card bulance 245,000 5,650,000 225,000 Net worth 6,915,150 Liubilities and Net Worth 6,901,445 6,915,150 End of Assignment 2 Table 3 - Information on Retirement Plan of Mary Ma Employee contribution $1,500 per month Employer contribution $1,500 per month Allocation of monthly contribution 50% capital preservation fund: 50% balanced fund Current value $245,000 Rate of return 3.5% Introduction Client: A middle-aged widow mother with two teenage sons Personal Background Mary Ma Age Nationality Occupation Employment history Monthly salary Non-smoker 43 Chinese Assistant branch manager Local fast food chain for 5 years $30,000 (net after employee's MPF contribution) PLUS one month's salary as bonus Mrs. Ma's husband died 18 months ago in a traffic accident, leaving her and their two teenage sons. As the related court case has recently concluded, Mrs. Ma will receive $1.2 million in compensation for her husband's death next week. Danny, their elder son, is in Form 6 and plans to go to a local university. Gary, the younger son, is in Form 4 and wishes to go to university in UK. Currently, Mrs. Ma hired a domestic helper to look after her family. Other Information Investments Mr. Ma left behind an investment portfolio of $1.67 million. Since Mrs. Ma has no experience with investments, it has been untouched since Mr. Ma's death. Mrs. Ma is apprehensive about making investments because her family has suffered some losses due to fluctuations in the market over the Table 4 - Economic Information and key Assumptions years. Because she has a busy schedule, she thinks it will be too stressful for her to manage an investment portfolia as well. Female: 87 Insurance Mrs. Mu bas already applied the death benefits from Mr. Ma's term life insurance to fully pay off the mortgage on the farnily home. In terms of insurance, all she owns is a home ownership insurance policy covering the contents in her home Avere life expectancy Expected average inflation Post-retirement investment return Discount rate MPF retum rute Education fees for local university Education fees for university in UK Expected retirement expenses 3% pa 5% pa. 6% 3.5% p... $50,000 per yeur Retirement Mrs. Ma wishes to work for her company until she is 65 yeurs old and then she will retire. 32,000 per year (including living fee) $15,000 per month in today's dollar Please also see the Appendix for further details in relation to the above. Table 5 - Investment Portfolio of Mary Ma Appendix Table 1 - Annual Consumption of Mary Ma and her 2 sons for the Year ended 31 March 2020 Stock Portfolio Banking (Hong Kong) Property & Construction Banking (Mainland China) Oil, Gas, Mining & Chemicals Tracker Fund Shipping Telecommunications Total Bcta 0.438 1.224 1.037 1.167 0.997 0.798 0.303 Quantity 2,000 5.000 5.000 12.000 10.000 5,000 5,000 Current Price $140.50 112.50 5.05 11.25 24.35 79.80 4.78 Total Value S281,000 562.500 25,250 135,000 243.500 399,000 23.900 $1.670.150 Consumption Items General household expenses Utilities Telephone Food Transportation Entertainment Children's education Insurance premium (home contents) Domestic helper MPF contribution Others Total S 24.000 21,600 10.200 86,400 36,000 12,000 42,000 5,400 48,000 12,000 6,000 303,600 Table 2 - Balance Sheet of Mary Maus of 31 March 2020 Required: Mrs. Ma wishes to know her current financial position. You are required to prepare a general financial analysis and help her to determine ber immediate objective with justification You are required to write her a memo to address the above issues. Marking rubrics The memo is expected to include as follows: Marks Format S Introduction section 5 Financial analysis and comment 15 Determination of objective 10 Closing section S S 13,830 Assets Cush and savings accounts Financial investment MPF account balance Family home Personal belongings Total wssets 125,000 Liabilities 670,150 Credit card bulance 245,000 5,650,000 225,000 Net worth 6,915,150 Liubilities and Net Worth 6,901,445 6,915,150 End of Assignment 2 Table 3 - Information on Retirement Plan of Mary Ma Employee contribution $1,500 per month Employer contribution $1,500 per month Allocation of monthly contribution 50% capital preservation fund: 50% balanced fund Current value $245,000 Rate of return 3.5%