投资学第7版Test Bank答案26(4)

46. How much does Alex currently have in the safe account; how much in the risky

account?

A) $31,200, $46,800

B) $39,000, $39,000

C) $32,000, $96,000

D) $45,300, $32,700

E) $64,000, $14,000

Answer: C Difficulty: Easy

Rationale: The safe account has .25*$128,000=$32,000 and the risky account

has .75*$128,000=$96,000.

47. Of the total amount of new funds that will be invested by Alex and by his employer on

his behalf, how much will Alex put into the safe account each year; how much into the risky account?

A) $2,500, $2,500

B) $3,200, $1,800

C) $3,000, $2,000

D) $1,250, $3,750

E) $2,400, $2,600

Answer: D Difficulty: Easy

Rationale: The safe account gets .25*($2,500+2,500)=$1,250 and the risky account

gets .75*($2,500+2,500)=$3,750.

投资学第7版Test Bank答案

48. How much can Alex be sure of having in the safe account at retirement?

A) $132,473

B) $162,557

C) $178,943

D) $189,211

E) $124,643

Answer: E Difficulty: Moderate

Rationale: The value in the safe account in 23 years will be $32,000*(1.04)23 +

$1,250*FVIFA4%,23 = $124,643.26.

49. How much can Alex expect to have in his risky account at retirement?

A) $1,400,326

B) $1,309,529

C) $1,543,781

D) $1,224,651

E) $1,345,886

Answer: A Difficulty: Moderate

Rationale: The value in the risky account in 23 years will be $96,000*(1.11)23 +

$3,750*FVIFA11%,23 = $1,400,326.

Use the following to answer questions 50-53:

Alan Barnett is 43 years old and has accumulated $78,000 in his self-directed defined contribution pension plan. Each year he contributes $1,500 to the plan and his employer

contributes an equal amount. Alan thinks he will retire at age 60 and figures he will live to age

83. The plan allows for two types of investments. One offers a 4% risk-free real rate of return. The other offers an expected return of 10% and has a standard deviation of 34%. Alan now has 40% of his money in the risk-free investment and 60% in the risky investment. He plans to continue saving at the same rate and keep the same proportions invested in each of the investments. His salary will grow at the same rate as inflation.

投资学第7版Test Bank答案

50. How much does Alan currently have in the safe account; how much in the risky

account?

A) $31,200, $46,800

B) $39,000, $39,000

C) $15,900, $62,100

D) $45,300, $32,700

E) $64,000, $14,000

Answer: A Difficulty: Easy

Rationale: The safe account has .4*$78,000=$31,200 and the risky account

has .6*$78,000=$46,800.

51. Of the total amount of new funds that will be invested by Alan and by his employer on

his behalf, how much will he put into the safe account each year; how much into the risky account?

A) $1,500, $1,500

B) $1,200, $1,800

C) $2,000, $1,000

D) $2,500, $500

E) $1,400, $1,600

Answer: B Difficulty: Easy

Rationale: The safe account gets .4*($1,500+1,500)=$1,200 and the risky account

gets .6*($1,500+1,500)=$1,800.

52. How much can Alan be sure of having in the safe account at retirement?

A) $59,473

B) $62,557

C) $78,943

D) $89,211

E) $104,632

Answer: D Difficulty: Moderate

Rationale: The value in the safe account in 17 years will be $31,200*(1.04)17 +

$1,200*FVIFA4%,17 = $89,211.

投资学第7版Test Bank答案

53. How much can Alan expect to have in his risky account at retirement?

A) $158,982

B) $309,529

C) $543,781

D) $224,651

E) $345,886

Answer: B Difficulty: Moderate

Rationale: The value in the risky account in 17 years will be $46,800*(1.10)17 +

$1,800*FVIFA10%,17 = $309,529.

54. An income beneficiary is __________.

A) a stockbroker who remained working on Wall Street after the 1987 crash

B) an employee of a trustee

C) one who receives interest and dividend income from a trust during their lifetime

D) one who receives the principal of a trust when it is dissolved

E) none of the above

Answer: C Difficulty: Easy

55. Assume that at retirement you have accumulated $750,000 in a variable annuity

contract. The assumed investment return is 9% and your life expectancy is 25 years. What is the hypothetical constant benefit payment?

A) $30,000.00

B) $33,333.33

C) $51,481.38

D) $76,354.69.

E) cannot tell without additional information.

Answer: D Difficulty: Moderate

Rationale: PV = -750,000, i = 9, n = 25, PMT = 76,354.69.

56. Assume that at retirement you have accumulated $750,000 in a variable annuity

contract. The assumed investment return is 9% and your life expectancy is 25 years. If the first year's actual investment return is 9%, what is the starting benefit payment?

A) $30,000.00

B) $33,333.33

C) $76,354.69

D) $52,452.73

E) cannot tell without additional information

Answer: C Difficulty: Difficult

Rationale: See 26.44, B = 76,354.69 (1.09/1.09) = 76,354.69