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Money Management – Midterm Assessment (30% Weight)
Your pension
Suppose you have reached retirement. You have saved a good
mount of money, say EUR 500,000, but, if you wish to take a
currency and and an amount more realistic for your country,
please do so.
You are now to make a comparison between two approaches to
using your wealth to see you through retirement:
A. Establish what yearly pension a life insurance company is
prepared to pay you for the rest of your life.
B. You manage your wealth yourself. Set an amount you want to
withdraw each year, and estimate what percent you can earn on
the outstanding balance.
All you numbers should be realistic for you and your country
and your situation.
Do stick to my simplifying conventions about the table
reflecting end-year movements and balances, and have a year
zero.
Share Analysis
Choose two companies from “Morningstar”. One should be a
company you might like to invest in and the other one you would
avoid.
Using the data on the Morningstar database available in the
library, explain the signification of the various financial
ratios related to the two companies you have chosen (e.g.
Price/Earnings, Price/Book, Price/Sales, Price/Cash Flow,
Dividend %).
Prepare a brief description of each company and explain why
one attracts you the other not.
