Alex Moore Is 43 Years Old and Has Accumulated $78,000

question 79

Multiple Choice

Alex Moore 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. Alex 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%. Alex 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. 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) $15,900; $62,100
• D) $45,300; $32,700
• E) $64,000; $14,000

Recognize the multifaceted causes of psychological disorders and the relevance of biological factors.

Describe the role and functions of oxytocin in human behavior and physiology.

Identify and differentiate between critical periods in developmental psychology.

Explain Darwin's theory of evolution and its applicability to behavioral traits and physical characteristics.

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, remaining constant even when business activity levels change.

Rural Sales Territory

A geographic area located in the countryside where a company's sales representatives focus their marketing and sales efforts.

Net Operating Income

The profit generated from a company's everyday business operations, excluding taxes and interest.

Absorption Costing

A strategy in accounting where the cost of a product encompasses all the production expenses: direct materials, direct labor, and manufacturing overheads, regardless of them being fixed or variable.