QUESTION King Solome The Rich Farmer US King Some is rich farmerie Tetchie, a town in the Ase Musical Assembly. He was over 100,000 hectares of farmlands. However, the four the worst might happen and wants to do ome investments to secure future and that of diren. He is contemplating some boy ter bevestments be could ndertake to secure store and the chilen. He is now 50 years old and le plans to retire in 10 years from the firework. He expects to live for another 3 years after he retines-that is, wag 5. He was dried by a friend that an investment in the mail market wil liep him plis retirement He les meile about financial markets and how they spenate. You recently pedd be just reported to work as an investment advisor at the brokerage fem of Cenden Lad Kes Science has approached your company for chrice. Your bous allerescunsice i King Stese could per the following Information King Soleme we festpynt to be the same purchasing power at the time he retires as He 40,000 has today. He was all of his subsequent retirement payment to be equal to the first teement payment Deset let de setement payments pow Examiner, Isaac Ofoeda with the King Sokerabes that the lake oficent income will decline year by year after he retires) His retirement come will begin the day he retires, 10 years from koday, and he will then recele 24 ditional compeyek Wat expected to be 5% per year from today forward. He currently las Greved, and be expects to cam rectum cebis savings of 9% per year with companie Agrin, he wants to have a cor ny date for his luchy drughter Daisy. His daughter is now 13 years old. She plasto ed at the Unay of Professional Stadics, Accra in 5 years, and it should take ler 4 years to complete beraie Currently, the cost per year (for everything her food, clothing tuitive, books, transportation, and so forthi Ghe 12.000 per year. This cost is expected to come control the four-your university education The daughter recently received Hg 7500 from branders (King David) esitate this money will be invested state of I to help met the costs of Daisy's deation. The rest of the costs will be met by money King Solomei deposit in wint which becams percent compound steres per year. He makes equal deposits in the second one deposit per annum starting one year from now widgets university. These deposits will begin one year from now. (Assume that school fees are paid at the beginning of the year) Api, King Solomon is interested in buying a bonded by Zene Pharma Led Zero Pharma intends to use the proceeds of the bands to face the productie is now vaccine for COVID 19. The bond best face value of the 10,000 toponit of 12 and a terme maturity of 10 years. The bond expects pay pes muy located in the bond indenture we call and sinking fand provisions. The required me of the art for bonds with similar features 19% per umum. Your bets had asked you to edit King Some based on the information be provided Required . Explain to King Solomon what fackel ich three (3) financial instruments he can investis (mara) To the searest ced, how much must be savedregeach of text 10 years with equal deposits being made at the end of each year, beping you from today to meet his retirement goal? (Note: Neither the amount he saves nor the amount he withdraws upon retirement is a growing annuity.) (5 marks) c. What will be the present value of the cost of 4 years of education at the time the daughter Daisy turns 18? (2 marks) d. What will be the value of the GH 7,500 that Daisy received from her grandfather's estate when she starts college at 18? (2 marks) e. If King Solomon is planning to make the first of 5 deposits one year from now, how large must each deposit be for him to able to put his daughter through college? (2 marks) f. Explain to King Solomon what call provisions and sinking fund provisions are and how these provisions are expected to affect the risk of the bond (2 marks) g. Which value will you place on a bond of Zenzo Pharma Ltd? (3 marks) QUESTION King Solome The Rich Farmer US King Some is rich farmerie Tetchie, a town in the Ase Musical Assembly. He was over 100,000 hectares of farmlands. However, the four the worst might happen and wants to do ome investments to secure future and that of diren. He is contemplating some boy ter bevestments be could ndertake to secure store and the chilen. He is now 50 years old and le plans to retire in 10 years from the firework. He expects to live for another 3 years after he retines-that is, wag 5. He was dried by a friend that an investment in the mail market wil liep him plis retirement He les meile about financial markets and how they spenate. You recently pedd be just reported to work as an investment advisor at the brokerage fem of Cenden Lad Kes Science has approached your company for chrice. Your bous allerescunsice i King Stese could per the following Information King Soleme we festpynt to be the same purchasing power at the time he retires as He 40,000 has today. He was all of his subsequent retirement payment to be equal to the first teement payment Deset let de setement payments pow Examiner, Isaac Ofoeda with the King Sokerabes that the lake oficent income will decline year by year after he retires) His retirement come will begin the day he retires, 10 years from koday, and he will then recele 24 ditional compeyek Wat expected to be 5% per year from today forward. He currently las Greved, and be expects to cam rectum cebis savings of 9% per year with companie Agrin, he wants to have a cor ny date for his luchy drughter Daisy. His daughter is now 13 years old. She plasto ed at the Unay of Professional Stadics, Accra in 5 years, and it should take ler 4 years to complete beraie Currently, the cost per year (for everything her food, clothing tuitive, books, transportation, and so forthi Ghe 12.000 per year. This cost is expected to come control the four-your university education The daughter recently received Hg 7500 from branders (King David) esitate this money will be invested state of I to help met the costs of Daisy's deation. The rest of the costs will be met by money King Solomei deposit in wint which becams percent compound steres per year. He makes equal deposits in the second one deposit per annum starting one year from now widgets university. These deposits will begin one year from now. (Assume that school fees are paid at the beginning of the year) Api, King Solomon is interested in buying a bonded by Zene Pharma Led Zero Pharma intends to use the proceeds of the bands to face the productie is now vaccine for COVID 19. The bond best face value of the 10,000 toponit of 12 and a terme maturity of 10 years. The bond expects pay pes muy located in the bond indenture we call and sinking fand provisions. The required me of the art for bonds with similar features 19% per umum. Your bets had asked you to edit King Some based on the information be provided Required . Explain to King Solomon what fackel ich three (3) financial instruments he can investis (mara) To the searest ced, how much must be savedregeach of text 10 years with equal deposits being made at the end of each year, beping you from today to meet his retirement goal? (Note: Neither the amount he saves nor the amount he withdraws upon retirement is a growing annuity.) (5 marks) c. What will be the present value of the cost of 4 years of education at the time the daughter Daisy turns 18? (2 marks) d. What will be the value of the GH 7,500 that Daisy received from her grandfather's estate when she starts college at 18? (2 marks) e. If King Solomon is planning to make the first of 5 deposits one year from now, how large must each deposit be for him to able to put his daughter through college? (2 marks) f. Explain to King Solomon what call provisions and sinking fund provisions are and how these provisions are expected to affect the risk of the bond (2 marks) g. Which value will you place on a bond of Zenzo Pharma Ltd
