Dusty Jones Is 23 Years Old and Has Accumulated $4,000

question 74

Multiple Choice

Dusty Jones is 23 years old and has accumulated $4,000 in her self-directed defined contribution pension plan. Each year she contributes $2,000 to the plan, and her employer contributes an equal amount. Dusty thinks she will retire at age 67 and figures she will live to age 81. The plan allows for two types of investments. One offers a 3.5% risk-free real rate of return. The other offers an expected return of 10% and has a standard deviation of 23%. Dusty now has 5% of her money in the risk-free investment and 95% in the risky investment. She plans to continue saving at the same rate and keep the same proportions invested in each of the investments. Her salary will grow at the same rate as inflation. How much can Dusty be sure of having in the safe account at retirement?

• A) $37,221
• B) $16,423
• C) $11,856
• D) $21,156.
• E) $49,219

---

Definitions:

Less Inhibited

Describes a state or condition where an individual shows reduced restraint or is more prone to expressing themselves freely and openly.

Narcissism

Narcissism is a psychological condition characterized by an inflated sense of self-importance, a deep need for excessive attention and admiration, and a lack of empathy for others.

Glamorous Photos

Photographs that are stylized and enhanced to appear more appealing and attractive, often involving a sense of luxury or elegance.

Social Networking Sites

Online platforms where individuals can create profiles, interact with friends, and share content, fostering social connections.