Life Assurance Exercises

A Calculate from the accounts of DEF Ltd printed on page 67 the following indicators, assuming the share price of the 50p shares to be 82p:

Yield on ordinaries Times dividend covered P/E ratio.

B You decide to buy l,000 ordinary 50p shares in the same company, DEF Ltd. If your broker quotes you 801/2p per share, what will the purchase cost you, including all charges?


Life Assurance As Investment

The subject of life assurance generally is treated in Chapter 12. A particular form of life assurance policy called an `endowment policy' is described in some detail on page 135. This kind of policy sets up a capital sum which becomes payable to you at the end of the agreed endowment period as well as providing protection for your dependants.

The possibility of using endowment policies as a savings and investment medium should not be overlooked in any long-term plan. The tax-free yield on the regular premiums invested can work out as high as 10.5% per annum.

TEST QUESTIONSLife Assurance As Investment


Personal And Business Finance 2013

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