Needs analysis EOC 17 Vol 4 reading 23

CFA Level III Portfolio Management
#1

Hi,

On EOC 17, we are asked to find the additional life insurance needed using needs analysis. As part of the data provided, we have a reduction of 30000 per year in living expense and a projected living expense of 50000. The solution only takes into account the 50000. Why don’t we subtract the 30 000 from the 50 000 in this case?

Thank you

#2

Reread the information.

What are the family’s expenses today?

What will they be should Adrian die?

What does the AUD 30,000 represent?

What does the AUD 40,000 represent?

#3

Got it. Thank you for guiding me.

#4

My pleasure.