You will continue to help M M family in building a successful financial plan Once again, if applicable, please consider apply the same concept to you own financial planning to build healthy financial habits In this assignment we are helping M M to prepare for the future to ensure having a sound retirement plan How to invest in the stock market and which investment vehicle that meet their future financial needs Instructions In this assignment, you continue to provide financial advising to Matthew and Martha (the M M family) If you recall M M started saving about $300 per month for the children's post secondary education They are currently investing this fund in GIC with their local bank However, they are learning about stock investment from TD bank free courses would like to explore the option to invest in stocks instead Your new notes can be found below in the notes section A list of their new questions for you to answer is also provided below in the questions section Notes Their GIC has a return of 4 compounded monthly If they invest in a specific stoke from this point on, they will a achieve compound annual return from 4 to 9 If the market is weak, they will achieve 4 similar to the CIG, if the stock market condition is strong, they can reach 9 return The stock return compound annually M M wants to compare the GIC that earns 4 to the stock assuming different scenarios from 4 to 9 Note to Students Students Can pick ONE assumption by comparing GIC at 4 vs Stock that gives you 7 return Remember, there is risk associated with stocks) Assume you are investing the $3600 all the once in the GIC for a year compared to a stock that gives you the 7 of return M M also learned about Investing in bonds with 12 years maturities which exactly when they need the fund for the post secondary expenses M M found out that Ontario government offers bonds with a coupon rate of 6 , compound monthly On the other hand, a new Tech company MakVision is seeking capital and offer 8 coupon rate compound monthly M M can purchase either type of bond at it is par value The income from the corporate bonds would be subject to tax at the marginal rate of 20 5 Since you are aware of ETF and Mutual funds, you might need to explain them the difference between ETF vs Mutual Funds M M concern about their financial planning journey Matthew's employer offers a defined contribution pension plan Matthew doesn't understand the concept of DCPP He is asking you to help understand as the employer will allow him to invest $5000 salary per year and will match his contribution which mean the total contribution is $10,000 per year The retirement fund will be invested in one or more mutual funds selected by Matthew Assume Matthew will receive 7 return a year compounded monthly Question Can you help M M to calculate the return on stock vs GIC

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You will continue to help M&M family in building a successful financial plan. Once again, if applicable, please consider apply the same concept to you

You will continue to help M&M family in building a successful financial plan. Once again, if applicable, please consider apply the same concept to you own financial planning to build healthy financial habits. In this assignment we are helping M&M to prepare for the future to ensure having a sound retirement plan. How to invest in the stock market and which investment vehicle that meet their future financial needs.

Instructions

In this assignment, you continue to provide financial advising to Matthew and Martha (the M&M family). If you recall M&M started saving about $300 per month for the children's post-secondary education. They are currently investing this fund in GIC with their local bank. However, they are learning about stock investment from TD bank free courses would like to explore the option to invest in stocks instead.

Your new notes can be found below in the "notes" section.

A list of their new questions for you to answer is also provided below in the "questions" section.

Notes:

Their GIC has a return of 4% compounded monthly.

If they invest in a specific stoke from this point on, they will a achieve compound annual return from 4% to 9%. If the market is weak, they will achieve 4% similar to the CIG, if the stock market condition is strong, they can reach 9% return. The stock return compound annually.

M&M wants to compare the GIC that earns 4% to the stock assuming different scenarios from 4% to 9%.

Note to Students:

Students Can pick ONE assumption by comparing GIC at 4% vs. Stock that gives you 7% return. Remember, there is risk associated with stocks).
Assume you are investing the $3600 all the once in the GIC for a year compared to a stock that gives you the 7% of return.

M&M also learned about Investing in bonds with 12 years maturities which exactly when they need the fund for the post-secondary expenses. M&M found out that Ontario government offers bonds with a coupon rate of 6%, compound monthly. On the other hand, a new Tech company MakVision is seeking capital and offer 8% coupon rate compound monthly.

M&M can purchase either type of bond at it is par value. The income from the corporate bonds would be subject to tax at the marginal rate of 20.5%

Since you are aware of ETF and Mutual funds, you might need to explain them the difference between ETF vs. Mutual Funds

M&M concern about their financial planning journey. Matthew's employer offers a defined contribution pension plan. Matthew doesn't understand the concept of DCPP. He is asking you to help understand as the employer will allow him to invest $5000 salary per year and will match his contribution which mean the total contribution is $10,000 per year. The retirement fund will be invested in one or more mutual funds selected by Matthew. Assume Matthew will receive 7% return a year compounded monthly

Question: Can you help M&M to calculate the return on stock vs. GIC?