Write an essay reflecting your views on Kerron’s response. Illustrate and support your position with reference to any one Caribbean country of your choice.
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Rhoda Rabs emigrated from the Caribbean to Toronto in her twenties to pursue employment
opportunities and have “a better life”. Rhoda has achieved her career goals in Toronto and has been
able to help support her extended family financially in the Caribbean through regular remittances
over the past 20 years. An island girl at heart, Rhoda would like to retire in the Caribbean within the
next 15 years, in this regard she has opened a deferred
Caribbean insurance company and is considering further equity and bond investments in the
Caribbean in preparation for her retirement.
During a recent family reunion trip, Rhoda shared her investment and retirement plans with her
nephew Kerron who is a second year student at the UWI faculty of Social Sciences. Kerron’s reply
was as follows:
“Aunty Rhoda I have just completed a course in Financial Institutions & Markets and I can give you
three good reasons NOT to invest in the Caribbean: (1) No one knows how interest rates are
determined in the Caribbean. (2) Caribbean banks are poorly regulated resulting in frequent financial
crises. (3) Caribbean stock markets show zero signs of
Rhoda, our financial systems in the Caribbean are weak.”
Required:
Write an essay reflecting your views on Kerron’s response. Illustrate and support your position with
reference to any one Caribbean country of your choice.
Step by step
Solved in 3 steps
- Rhoda Rabs emigrated from the Caribbean to Toronto in her twenties to pursue employment opportunities and have “a better life”. Rhoda has achieved her career goals in Toronto and has been able to help support her extended family financially in the Caribbean through regular remittances over the past 20 years. An island girl at heart, Rhoda would like to retire in the Caribbean within the next 15 years, in this regard she has opened a deferred annuity retirement account with a major Caribbean insurance company and is considering further equity and bond investments in the Caribbean in preparation for her retirement. During a recent family reunion trip, Rhoda shared her investment and retirement plans with her nephew Kerron who is a second year student at the UWI faculty of Social Sciences. Kerron’s reply was as follows:“Aunty Rhoda I have just completed a course in Financial Institutions & Markets and I can give you three good reasons NOT to invest in the Caribbean: (1) No one knows…Rhoda Rabs emigrated from the Caribbean to Toronto in her twenties to pursue employmentopportunities and have “a better life”. Rhoda has achieved her career goals in Toronto and has beenable to help support her extended family financially in the Caribbean through regular remittancesover the past 20 years. An island girl at heart, Rhoda would like to retire in the Caribbean within thenext 15 years, in this regard she has opened a deferred annuity retirement account with a majorCaribbean insurance company and is considering further equity and bond investments in theCaribbean in preparation for her retirement.During a recent family reunion trip, Rhoda shared her investment and retirement plans with hernephew Kerron who is a second year student at the UWI faculty of Social Sciences. Kerron’s replywas as follows:“Aunty Rhoda I have just completed a course in Financial Institutions & Markets and I can give youthree good reasons NOT to invest in the Caribbean: (1) No one knows how…You are making plans for your retirement. You have just turned 30 and want to retire on your 65th birthday. Once retired, you plan to move to a tax-free Caribbean state, where you believe you can live comfortably on $10,000 per month. Your first payment of $10,000 will occur one month after you retire, and you will receive your last instalment from your retirement fund on your 85th birthday when you intend to move back to Canada and depend on your kids for support. Your current salary is $60,000 per year, or $5,000 per month. Your personal tax rate is approximately 25%. You estimate that you can earn an average return of 10% APR compounded monthly on any money you invest over the next 60 years. You will make your first deposit one month from now and your last deposit on your 65th birthday. To ensure that you are able to achieve your retirement objective, what percentage of your after-tax monthly. income must you save? Select one: a. 4.52% of after tax monthly income b. 5.46% of after…
- In 2020, Regina moved across the country from the east coast to the west coast. She was moving because the advertising agency she worked for wanted her to relocate to work with a big new client the company had landed on the west coast. Her company reimbursed $7,500 of moving expenses (her total cost for the move), and her total wages for the year were $110,000 While living on the west coast, she began volunteering for a children's hospital doing public relations for their office. She estimated her time volunteering at the hospital during the year was worth $7,000. She also paid $350 in professional ducs to the American Association of Advertising Agencies the beginning of the year, which was rimbursed by her employer. Determine Regina AG for 2020. a. None of the above. b. $117,500 c. $110.150 d. $110,000 e. $117,150Jason worked various jobs during his teenage years to save money for college. Now it is his twentieth birthday, and he is about to begin his college studies at the University of South Florida (USF). A few months ago, Jason received a scholarship that will cover all of his college tuition for a period not to exceed five years. The money he has saved will be used for living expenses while he is in college; in fact, Jason expects to use all of his savings while attending USF. The jobs he worked as a teenager allowed him to save a total of $10,000, which currently is invested at 12 percent in a financial asset that pays interest monthly. Because Jason will be a full-time student, he expects to graduate four years from today, on his twenty-fourth birthday. a. How much can Jason withdraw every month while he is in college if the first withdrawal occurs today? b. How much can Jason withdraw every month while he is in college if he waits until the end of this month to make the first…Kelly is a diligent mother who has just finished supporting her two children, Susan, aged 23, and Randy, aged 25, through their university education. Both Susan and Randy have embarked on their careers and have moved out. Kelly wants to continue supporting them by providing financial assistance for their future endeavors, such as purchasing their first home or pursuing further education. She aims to give each of them an equal amount of money when they reach the age of 30. Currently, Kelly has $15,000 in savings, which she plans to allocate to Randy, as she will reach 30 first. She intends to provide Randy with $35,000. Kelly's investments generate a 6% return before tax, and her marginal tax rate is 35%. The inflation rate is estimated to be 3%.All savings are deposited at the end of the year.Required:(a) Calculate the annual savings Kelly needs to make to accumulate $35,000 to give to Randy when she turns 30.(b) Determine the fair amount Kelly should give to Susan when she reaches 30,…
- Kelly is a diligent mother who has just finished supporting her two children, Susan, aged 23, and Randy, aged 25, through their university education. Both Susan and Randy have embarked on their careers and have moved out. Kelly wants to continue supporting them by providing financial assistance for their future endeavors, such as purchasing their first home or pursuing further education. She aims to give each of them an equal amount of money when they reach the age of 30. Currently, Kelly has $15,000 in savings, which she plans to allocate to Randy, as she will reach 30 first. She intends to provide Randy with $35,000. Kelly's investments generate a 6% return before tax, and her marginal tax rate is 35%. The inflation rate is estimated to be 3%.All savings are deposited at the end of the year.Required:(a) Calculate the annual savings Kelly needs to make to accumulate $35,000 to give to Randy when she turns 30.(b) Determine the fair amount Inaaya should give to Susan when he reaches 30,…Felicidad Ramirez has come of age and now has access to a very substantial trust fund. The trust fund allows her to invest part of the money she will inherit. Felicidad is a multi-awarded pastry chef and has been working as a head baker in one of the trendy bakeries in New Jersey. With her newfound fortune, Felicidad is now considering opening her own bakery. She wants to start one in Seattle where she was born and raised. However, she also has some friends who believe that she should also open a "twin" branch in New York where they feel her trendy baked goodies would be very well-accepted by the market. Felicidad's friends think that it would be so cool if she could open the two locations at the same time. Felicidad is mulling over her options and is also considering to continue working at her current job and not open her own bakeries. Felicidad's best friend, Travis, helped her prepare a payoff table to help her analyze the situation. States of Nature (amounts are in $'000s)…You are making plans for your retirement. You have just turned 30 and want to retire on your 65th birthday. Once retired, you plan to move to a tax-free Caribbean state, where you believe you can live comfortably on your retirement savings. You plan to make your first withdrawal from your retirement savings when you retire at age 65 and your last withdrawal one month before your 85th birthday. Based on family history, you expect to live until exactly age 85. Your plan is to have a total of $1 million when you retire. Your current salary is $36,000 per year, or $3,000 per month. Your personal tax rate is approximately 30%. You estimate that you can earn an average return of 12% APR compounded annually on any money you invest over the next 60 years. You want to start putting aside a fixed amount of money at the end of every month until your retirement at age 65. You will make your first deposit one month from now and your last deposit on your 65th birthday. Given that you have $1…
- Danny and Sandy have come to your office to discuss some retirement planning issues. Danny will be turning age 65 in five months and Sandy is currently 63. Danny has not started collecting Social Security benefits yet because he is still working, and he is unsure whether he will retire this year or wait a few more years. Sandy has never worked outside the home. If he continues to work, Danny will have health insurance for both himself and Sandy through his employer with a $250 annual per person deductible, a 90% coinsurance, and a maximum out-of-pocket limit of $5,000. Danny’s share of the premium is $50 per pay. Many of their retirement questions have to do with Medicare and health insurance because both Danny and Sandy have existing health issues. All the following statements are proper advice for you to give Danny and Sandy, EXCEPT: Danny should delay enrollment in Medicare Part B until he is no longer covered under his employer’s health plan. Sandy will be eligible for…Michiko and Saul are planning to attend the same university next year. The university estimates tuition, books, fees, and living costs to be 12,000 per year. Michikos father has agreed to give her the 12,000 she needs to attend the university. Saul has obtained a job at the university that will pay him 14,000 per year. After discussing their respective arrangements, Michiko figures that Saul will be better off than she will. What, if anything, is wrong with Michikos thinking?Se Ri Pak, age 23, recently graduated with her bachelor's degree in library and information sciences. She is about to take her first professional position as an archivist with a civil engineering firm in a rapidly expanding area in the U.S. Southwest. While in school, Se Ri worked part time, earning about $8000 per year. For the past two years, she has managed to put $1000 each year into an individual retirement account (IRA), Se Ri owes $15,000 in student loans on which she is obliged now to begin making payments. Her new job will pay $45,000. Se Ri may begin participating in her employer's 401(k) retirement plan immediately, and she can contribute up to 6 percent of her salary to the plan. Her employer will contribute 1/2 of 1 percent for every 1 percent that Se Ri contributes. What do you recommend to Se Ri on the importance of personal finance regarding: 3. Factoring the current state of the economy into her personal financial planning?