Shelly and Alan are both 38 years old. They are non-smokers and have 2 young children, Brandon (8) and Ally (6). They have recently switched financial institutions to renew their mortgage and as a special bonus have been offered a free financial plan. The Financial Planner has met with the couple and collected the following information: Description Assets Liabilities Income Expenses/Payments Annual Earnings $145,000 Shelly $85M + Alan $60M *assume an income tax rate of 30% Home $550,000 Mortgage $350,000 $1,840/mo Heat/Hydro/Taxes $700/mo Cars (2) $35,000 Car loan $15,000 $450/mo Savings Account $2,500 (joint) Shelly's RRSP $25,000 (contributing $2,000/yr) Alan's RRSP $40,000 (contributing $4,000/yr) Group life insurance policies $145,000 Shelly $85M, Alan $60M (spouse is beneficiary for both) Credit card Low interest rate credit card (12%) with a limit of $12,000) $5,000 owing Minimum payment is 5% / mo General Expenses Groceries/ Drug Store $600/mo Children's activities, travel clothing $8,000/yr

Question #1 Assess Shelly and Alan's current financial situation using all applicable financial formulas and ratios, the complete SWOT analysis to determine their financial strengths, weaknesses, opportunities, and threats.

Question #2 Shelly and Alan have recently lost a close friend in a car accident. They feel so sad to see their friend's wife left struggling to raise and provide for her 2 children all alone. Shelly and Alan have given some thought to the family's financial affairs should one or both of them unexpected pass away. Their wishes include: that if one spouse dies the family remains in the home, $140,000 is required for the children's post secondary education, if one spouse passed away the other would need supplemental income equivalent to 50% of the other spouse's gross income until Ally completed a post secondary degree at age 22. If they both passed away Alan's sister would become the children's guardian, would take them into her home and would require annual income of $20,000 each until Ally completed a post secondary degree at 22. Shelly and Alan would like the team to assess the amount of life insurance they would need if: 1) Shelly passed away 2) Alan passed away and 3) both pass away. *make and state any assumptions (ie. Interest earned - inflation) and ignore estate taxes

Question #3 Provide 2 options of how Shelly & Alan could use their monthly surplus cash to address any of the weaknesses, opportunities or threats identified. Provide rationale for each option and how it addresses a gap or capitalizes on an opportunity, state any information/questions you may have of the clients and clarify next steps.

Duestlon 2 [I13 points) The drop in housing values has a Iavealth effect that most directly affects which component of aggregate cieman cl? Question 2 options: - Government Purchases - Investment . Guestlon 3 {0.3 points] The drop in new housing construction most directly affects Ia'vhich component of aggregate demand? Question 3 options: I w - Government Purchases . . 2. A survey of a sample of business students resulted in the following information regarding the genders of the individuals and their selected major. (25 pts) Selected Major Gender Economics Finance Others Total Male 60 140 40 240 Female 40 60 60 160 Total 100 200 100 400 a. What is the probability of selecting an individual who is majoring in Economics? b. What is the probability of selecting an individual who is majoring in Finance, given that the person is male? C. What is the probability that an individual is a female and majoring in Others? d. What is the probability that an individual is either a female or majoring in Finance? e. What is the probability of selecting an individual who is either majoring in Finance or in Economics?In which type of market structure can a tax improve efficiency of the market? No market structures. Perfect competition with a negative externality. Perfect competition with no externality. Perfect competition with a positive externality. Any market structures with no externalities.Because fluctuations in the world oil price make the U.S. short-run macroeco- comic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and increasing the tax when the world oil price falls, to stabilize the oil price in the US. market. 4. How would such an action influence aggregate demand? 5. How would such an action influence aggregate supply?E. One month Question 5: An increase in real wealth in India will . Select all that apply. Choose one or more: A. increase Indian aggregate demand B. decrease Indian aggregate demand C. increase U.S. aggregate demand D. decrease U.S. aggregate demand Question 6: Choose the right answer: Net exports will increase/decrease/stay the same when the value of the dollar result, the aggregate demand curve will shift left/increase. ECON 1204-001 Principles of Macro Spring 2019 Question 7