1. Beth has just had her 45th birthday. She has two children. One will go to col

Question

1. Beth has just had her 45th birthday. She has two children. One will go to college 4 years from now and require four year beginning-of-year payments for college expenses, $18,000, $19,500, $20,500, and $21,500. The other will go to college 9 years from now and require four year beginning-of-year payments for college expenses, $23,000, $23,500, $24,000, and $24,500. In addition, Beth plans to retire in 20 years. Beth wants to be able to withdraw $100,000 per year (at the end of each year) from an account for 25years. The first withdraw occurs on her 66st birthday. What equal, annual, end

Explanation / Answer

1.c. $32,939.42

2. d. 8.03%

3.b. $10.00

4. c. $95,000.00

5.b. Portfolio beta = 0.75, and Portfolio expected return = 5.4%.

6. a. $40,477.63

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