LIDWORE Man will be awarded for professional presentation) (Total: 20 marks) Question 3 King Solomon- The Rich Fariner King Solomon is a rich farmer in Tetebia, a town in the Asou Municipal Assembly. He owns over 100.000 hectares of farmlands. However, he fears the worst might happen and wants to do some investments to secure his future and that of his children. He is contemplating several long term investments he could undertake to secure his future and that if his children. He is now 50 years old and he plans to retire in 10 years from active farm work. He expects to live for another 25 years after he retires-that is, until age 85. He heard about an investment in the financial market will help him plan his retirement well. He has no idea about financial markets and how they operate. You recently graduated and have just reported to work as an investment advisor at the brokerage firm of Cenden Ltd. King Solomon has approached your company for advice Your boss after a discussion with King Solomon could gather the following information. King Solomon wants his first retirement payment to have the same purchasing power at the time he retires as GHe 40.000 has today. He wants all of his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: King Solomon realizes that the real value of his retirement income will decline year by year after he retires.) His retirement income will begin the day he retires. 10 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 3% per year from today forward. He currently has GHe 100.000 saved up, and he expects to eam a return on his savings of 8% per year with annual compounding, Again, he wants to have a secure university education for his lovely daughter Daisy. His daughter is now 13 years old. She plans to enroll at the University of Professional Studies. Accra in 5 years, and it should take her 4 years to complete her education. Currently, the cost per year and so forth is GHe 12.000 LIDWORE Man will be awarded for professional presentation) (Total: 20 marks) Question 3 King Solomon- The Rich Fariner King Solomon is a rich farmer in Tetebia, a town in the Asou Municipal Assembly. He owns over 100.000 hectares of farmlands. However, he fears the worst might happen and wants to do some investments to secure his future and that of his children. He is contemplating several long term investments he could undertake to secure his future and that if his children. He is now 50 years old and he plans to retire in 10 years from active farm work. He expects to live for another 25 years after he retires-that is, until age 85. He heard about an investment in the financial market will help him plan his retirement well. He has no idea about financial markets and how they operate. You recently graduated and have just reported to work as an investment advisor at the brokerage firm of Cenden Ltd. King Solomon has approached your company for advice Your boss after a discussion with King Solomon could gather the following information. King Solomon wants his first retirement payment to have the same purchasing power at the time he retires as GHe 40.000 has today. He wants all of his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: King Solomon realizes that the real value of his retirement income will decline year by year after he retires.) His retirement income will begin the day he retires. 10 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 3% per year from today forward. He currently has GHe 100.000 saved up, and he expects to eam a return on his savings of 8% per year with annual compounding, Again, he wants to have a secure university education for his lovely daughter Daisy. His daughter is now 13 years old. She plans to enroll at the University of Professional Studies. Accra in 5 years, and it should take her 4 years to complete her education. Currently, the cost per year and so forth is GHe 12.000