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

question 41

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 can Alex be sure of having in the safe account at retirement?

• A) $59,473
• B) $62,557
• C) $78,943
• D) $89,212
• E) $104,632

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Definitions:

Encounter Data

Encounter data refers to the detailed information collected during healthcare encounters, documenting patient services and interactions.

Electronic Medical Record

A digital version of a patient's paper chart, allowing for easier access and management of a patient's medical history.

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The identification of the nature of an illness or other problem by examination of the symptoms and signs.

Business Transaction

An economic event with a third party that is recorded in an organization's accounting system.