TEST 1 - Page 1 of 2 Opportunity #1, FIRE 314, Fall 2007...

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Page 1 of 2 Opportunity #1, FIRE 314, Fall 2007 PLEASE PUT ALL ANSWERS IN THE BLUE BOOK! PLEASE READ THIS SCTION BEFORE CONTINUING!!! 1) You are allowed one 8 1/2 x 11 sheet of notes. 2) You are allowed to use a hand-held calculator for calculations. 3) Please answer clearly. Clarity of presentation is considered part of the answer. Unclear or imprecise answers will not receive full credit. 4) Show all work in quantitative problems! No credit will be given if the chain of reasoning is not evident in the answer. (does not apply to multiple choice) 5) Any lapse of ethical behavior will be referred directly to honor code. Questions are 4 pts. each 1) Anita Lotabucks, a new client, has said that she would like to retire at age 62, will require $45,000 each year during retirement, and expects to live to age 87. Since Anita will hold a low-risk portfolio of both stocks and bonds during retirement, you estimate that she will have a return of 6%. Compute the amount that Anita needs on the day of her retirement. 2)
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TEST 1 - Page 1 of 2 Opportunity #1, FIRE 314, Fall 2007...

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