NISM Series X-B: Investment Adviser (Level 2) Cert. 'Case Study 3'

Mr. A and Mrs. B, aged 35 and 32, are starting to invest monthly in a Balanced Mutual Fund with a 9% annual yield. This investment will continue until Mr. A retires at 60. After retirement, they plan to invest the accumulated funds in an investment with a 7% annual yield. They aim to have Rs. 1 lakh in the first month of Mr. A’s retirement, adjusted for inflation monthly until Mrs. B’s expected life of 85 years. Mr. A’s life expectancy is 82 years. All calculations assume an annual inflation rate of 5%.

Q)For how many years post-retirement, they require the corpus to last?

Mr. A and Mrs. B, aged 35 and 32, are starting to invest monthly in a Balanced Mutual Fund with a 9% annual yield. This investment will continue until Mr. A retires at 60. After retirement, they plan to invest the accumulated funds in an investment with a 7% annual yield. They aim to have Rs. 1 lakh in the first month of Mr. A’s retirement, adjusted for inflation monthly until Mrs. B’s expected life of 85 years. Mr. A’s life expectancy is 82 years. All calculations assume an annual inflation rate of 5%.

Q)Calculate the effective monthly rate offered by the Balanced scheme?

Mr. A and Mrs. B, aged 35 and 32, are starting to invest monthly in a Balanced Mutual Fund with a 9% annual yield. This investment will continue until Mr. A retires at 60. After retirement, they plan to invest the accumulated funds in an investment with a 7% annual yield. They aim to have Rs. 1 lakh in the first month of Mr. A’s retirement, adjusted for inflation monthly until Mrs. B’s expected life of 85 years. Mr. A’s life expectancy is 82 years. All calculations assume an annual inflation rate of 5%.

Mr. A and Mrs. B, aged 35 and 32, are starting to invest monthly in a Balanced Mutual Fund with a 9% annual yield. This investment will continue until Mr. A retires at 60. After retirement, they plan to invest the accumulated funds in an investment with a 7% annual yield. They aim to have Rs. 1 lakh in the first month of Mr. A’s retirement, adjusted for inflation monthly until Mrs. B’s expected life of 85 years. Mr. A’s life expectancy is 82 years. All calculations assume an annual inflation rate of 5%.

Q)Monthly investments required in the Balanced MF scheme till retirement is _________.

Mr. and Mrs. Gupta, both 45 years old, were employed with multinational companies in the United States for the past 20 years. They’ve left their jobs to start a venture in India, funded by a Silicon Valley-based Venture fund. They own a house in the USA, rented out to tenants. Their retirement investments in the USA are tax-deferred, meaning contributions and earnings are taxed upon withdrawal. They’ve taken substantial life insurance policies, with a payout of USD 1 million each if either passes away within the next 15 years. Their employer-provided health insurance in the USA is valid until the end of the year, but they need to decide whether to renew it independently. They have questions about their relocation and would like your opinion.

Q)After they become resident in India as per Indian tax laws they will have to pay tax in India on their rental Income from the US property. Is this statement true ?

Mr. and Mrs. Gupta, both 45 years old, were employed with multinational companies in the United States for the past 20 years. They’ve left their jobs to start a venture in India, funded by a Silicon Valley-based Venture fund. They own a house in the USA, rented out to tenants. Their retirement investments in the USA are tax-deferred, meaning contributions and earnings are taxed upon withdrawal. They’ve taken substantial life insurance policies, with a payout of USD 1 million each if either passes away within the next 15 years. Their employer-provided health insurance in the USA is valid until the end of the year, but they need to decide whether to renew it independently. They have questions about their relocation and would like your opinion.

Q)The income accrued on the deferred tax retirement account will be taxed only in the year when such money is withdrawn. Which of the following statements is true ?

Mr. and Mrs. Gupta, both 45 years old, were employed with multinational companies in the United States for the past 20 years. They’ve left their jobs to start a venture in India, funded by a Silicon Valley-based Venture fund. They own a house in the USA, rented out to tenants. Their retirement investments in the USA are tax-deferred, meaning contributions and earnings are taxed upon withdrawal. They’ve taken substantial life insurance policies, with a payout of USD 1 million each if either passes away within the next 15 years. Their employer-provided health insurance in the USA is valid until the end of the year, but they need to decide whether to renew it independently. They have questions about their relocation and would like your opinion.

Q)Both of them will need to buy Life Insurance policies in India for covering the risk of death. Which of the following is true ?

Mr. and Mrs. Gupta, both 45 years old, were employed with multinational companies in the United States for the past 20 years. They’ve left their jobs to start a venture in India, funded by a Silicon Valley-based Venture fund. They own a house in the USA, rented out to tenants. Their retirement investments in the USA are tax-deferred, meaning contributions and earnings are taxed upon withdrawal. They’ve taken substantial life insurance policies, with a payout of USD 1 million each if either passes away within the next 15 years. Their employer-provided health insurance in the USA is valid until the end of the year, but they need to decide whether to renew it independently. They have questions about their relocation and would like your opinion.