Alex Goh Is 39 Years Old and Has Accumulated $128,000

question 64

Multiple Choice

Alex Goh is 39 years old and has accumulated $128,000 in his self directed defined contribution pension plan. Each year he contributes $2,500 to the plan, and his employer contributes an equal amount. Alex thinks he will retire at age 62 and figures he will live to age 86. 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 11% and has a standard deviation of 37%. Alex now has 25% of his money in the risk free investment and 75% 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 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

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Definitions:

Functionalist View

A viewpoint within sociology which views society as an intricate system where its components cooperate to foster unity and maintain stability.

Femininity

A set of attributes, behaviors, and roles generally associated with girls and women, which are socially constructed.

Masculinity

A set of attributes, behaviors, and roles typically associated with boys and men, as socially constructed and culturally variable.

Instrumental Trait

A characteristic or behavior that is used as a means to achieve some other end or goal.