Answered

Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Experience the ease of finding accurate answers to your questions from a knowledgeable community of professionals. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

Client #007 has a portfolio valued at $ 1,100,000 and wants to increase the value to $1,200,000 in 5
years. An analysis of the client's non-portfolio inflows and outflows shows the client will need $15,000
from the portfolio in one year and this amount is estimated to rise by 3% inflation per year. What is the
client's calculated return need?
Fy07
Returns

Sagot :

anthougo

Answer:

Client #007

The client's calculated return need is:

= $

Explanation:

a) Data and Calculations:

Value of portfolio = $1,100,000

Estimated value of portfolio in 5 years = $1,200,000

Expected returns in 5 years = $100,000 ($1,200,000 = $1,100,000)

This translates to 9.1% ($100,000/$1,100,000 * 100)

Annual rate of return = 1.82% (9.1/5)

Client's need = $15,000

Client's need after considering inflation rate of 3%

The client's calculated return need = $1,100,000 * 9.1% * 1.16

= $116,116

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.