ASSUMPTIONS You should use the following assumptions in your calculations. If you need to make other assumptions please state them. Inflation 2%, investment earnings 4%, investment growth 4%, cash interest rate is 1.5%, interest rates on mortgage borrowings 3%.
BAFI 1016
1 Personal Wealth Management
SEMESTER 1 2013
Question 1 Calculate the following ratios for Winston and Yvonne • • • • Net worth ratio Liquidity ratio Savings ratio Debt service ratio
Describe what stage in the life cycle Winston and Yvonne are in. Based on the ratios you have calculated, summarise and analyse Winston and Yvonne’s current financial situation commenting on whether their situation is as you would expect for a couple in that stage of the lifecycle. 10 Marks Question 2 Calculate the amount Winston and Yvonne would need to