During a casual family gathering, a relative by the name of Uncle Tom asked you some investment-related questions as he can withdraw about $200,000 worth of cash from his CPF.
Only do question 4! Essay consist of 1100 words. Thank-you
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Investment Options You are a financial planner at a well-known financial planning firm. During a casual family gathering, a relative by the name of Uncle Tom asked you some investment-related questions as he can withdraw about $200,000 worth of cash from his CPF. He queried about the difference between Singapore Government Bonds and Fixed Deposits, as well as how long one should lock in their money. You explained to Uncle Tom that Singapore Government Securities (SGS) bonds and Treasury bills (T-bills) are marketable debt instruments of the Government of Singapore. These debt instruments are considered safe investments, as they are backed by the full credit of the Singapore Government. As such they are seen as almost risk free because it is very unlikely that a government can go bankrupt and not able to pay its loans. Besides the government has a tax revenue stream it can use to repay its borrowings. You further explained to Uncle Tom: “Fixed deposits are backed by the credit rating of the bank. Unlike when you borrow from the bank, the bank does not give you any collateral when it borrows from you. However, it is obligated to pay you your interest and principal when it falls due. The bank can however default when it goes bust as we have seen in past years in the Europe and the United States. When a bank fails, depositors may lose all or part of their money, including fixed depositors.” Based on your hunch, you know that Uncle Tom will be asking more detailed questions and in anticipation, you proceed to download the historical interest rate dataset from the Department of Statistics Singapore. Please use the Excel software and the data file “BUS105e_GBA_Data_Interest.xlsx” to answer the following questions.
Question 4 (a) Uncle Tom mentioned that his friends once told him that statistics can sometimes be used to mislead. Being a responsible financial planner, you agree with him. Highlight three (3) possible concerns in business or statistical aspects regarding the approach used here. Also, if you have a free hand on the project starting from sampling to analysis, how would you conduct the project analysis and what recommendations would you give for the problem in question? Please keep your answer within 800 words (indicate your word count). (15 marks) (b) Provide an executive summary of your analysis to Uncle Tom and advise him within 300 words (indicate your word count). Note that Uncle Tom does not have the same statistical literacy as you.
Investment Options You are a financial planner at a well-known financial planning firm. During a casual family gathering, a relative by the name of Uncle Tom asked you some investment-related questions as he can withdraw about $200,000 worth of cash from his CPF. He queried about the difference between Singapore Government Bonds and Fixed Deposits, as well as how long one should lock in their money. You explained to Uncle Tom that Singapore Government Securities (SGS) bonds and Treasury bills (T-bills) are marketable debt instruments of the Government of Singapore. These debt instruments are considered safe investments, as they are backed by the full credit of the Singapore Government. As such they are seen as almost risk free because it is very unlikely that a government can go bankrupt and not able to pay its loans. Besides the government has a tax revenue stream it can use to repay its borrowings. You further explained to Uncle Tom: “Fixed deposits are backed by the credit rating of the bank. Unlike when you borrow from the bank, the bank does not give you any collateral when it borrows from you. However, it is obligated to pay you your interest and principal when it falls due. The bank can however default when it goes bust as we have seen in past years in the Europe and the United States. When a bank fails, depositors may lose all or part of their money, including fixed depositors.” Based on your hunch, you know that Uncle Tom will be asking more detailed questions and in anticipation, you proceed to download the historical interest rate dataset from the Department of Statistics Singapore. Please use the Excel software and the data file “BUS105e_GBA_Data_Interest.xlsx” to answer the following questions.
Question 4 (a) Uncle Tom mentioned that his friends once told him that statistics can sometimes be used to mislead. Being a responsible financial planner, you agree with him. Highlight three (3) possible concerns in business or statistical aspects regarding the approach used here. Also, if you have a free hand on the project starting from sampling to analysis, how would you conduct the project analysis and what recommendations would you give for the problem in question? Please keep your answer within 800 words (indicate your word count). (15 marks) (b) Provide an executive summary of your analysis to Uncle Tom and advise him within 300 words (indicate your word count). Note that Uncle Tom does not have the same statistical literacy as you.
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