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Genny Webb Is 27 Years Old and Has Accumulated $7,500

question 15

Multiple Choice

Genny Webb is 27 years old and has accumulated $7,500 in her self directed defined contribution pension plan. Each year she contributes $2,000 to the plan, and her employer contributes an equal amount. Genny thinks she will retire at age 63 and figures she will live to age 90. The plan allows for two types of investments. One offers a 3% risk free real rate of return. The other offers an expected return of 12% and has a standard deviation of 39%. Genny now has 20% of her money in the risk free investment and 80% 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 Genny expect to have in her risky account at retirement?

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Definitions:

Lacrimal

Relating to the tears or the glands that produce tears, involved in lubricating and protecting the eye.

Mandible

The lower jawbone, which is the largest and strongest bone of the face and holds the lower teeth.

Squamous Suture

A cranial suture located between the parietal and temporal bones of the skull.

Temporal Bone

A paired bone located at the sides and base of the skull, playing a key role in protecting the brain and supporting the facial structures.