QUESTION THREE

$[20)$ Marks$]$

a$)$ Differentiate between the whole life insurance polky and Endowment policy

$[5$ Marks$]$

b$)$ Juma has a monthly salary of TZS $30,001$ of which $30\%$s is invested in a ISPT pension fund. The contributions to the Fund are made over $30$ years, and the average rate of return on the Fund is $6\%$ p$.$a$.$ in real terms fie, allowing for infiation$).$

The expected life expectancy at retirement is $210$ years. The real rate of return on government bonds at the time of retirement is $3\%.$

Required:

c$)$ What would be the expected value of a pension fund after $35$ years?

$[5$ Marks$]$

d$)$ What annual pension $($annuity$)$ should the person receive during $18$ years of retirement period?

$[5$ Marks$]$

e$)$ Briefly explain different pension products offered by Pension Fund in Tanzania.

$[5$ Marks$]$

QUESTION FOUR $[20$ Marks$]$

Family lnvestment Trust holds TZ$56M$ of shares, in a total of $8$ companies, in its fund. Currently, there are $600$ Family Investment Trust shares in issue. The current Family Investment Trust share price is TZ $9,700.$ REQUIRED:

a$)$ What is the net asset value $($NAV$)$ of Family Investment Trust? $[9$ Marks$]$

b$)$ What is the percentage of discount$/$premium$?$

$[9$ Marks$]$

$3$