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An employer has a choice of how benefits will be distributed if it terminates its qualified plan. The plan can be designed to accommodate all of the following distribution possibilities except:

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An employer has a choice of how benefits will be distributed if it terminates its qualified plan. The plan can be designed to accommodate all of the following distribution possibilities except:

A. The plan can purchase paid-up annuities from an insurance company.
B. The plan can distribute benefits in cash or in kind if stock or insurance policies are involved.
C. The plan can purchase deferred annuities from the PBGC if it is currently fully funded.
D. The plan can give participants the option to receive a lump-sum or a deferred-annuity contract.

Given an individual risk profile, be it an aversion to risk or a high tolerance for risk; and, the current relatively low level of

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Given an individual risk profile, be it an aversion to risk or a high tolerance for risk; and, the current relatively low level of interest rates would he invest today in an asset, like a US Government Bond, that has a long term fixed cash flow associated with it? Remember to consider the investment time frame and investment purpose when setting forth his investment opinion.

“A two paragraphed answer, should give me the understanding I’m looking for.”

1. Consider the following four investments. A.You invest $3,000 annually in a mutual fund that earns 10 percent annually, and

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1. Consider the following four investments.
A.You invest $3,000 annually in a mutual fund that earns 10 percent annually, and you reinvest all distribution. How much will you have in the account at the end of 20 years?
B. You invest $3,000 annually in a mutual fund with a 5 percent load fee so that only $2,850 is actually invested in the fund. The fund earns 10 percent annually, and you reinvest all distributions. How much will you have in the account at the end of 20 years? (Assume that all distributions are not subject to the load fee.)
C. You invest $3,000 annually in a no-load mutual fund that charges 12b-1 fees of 1 percent. The fund earns 10 percent annually before fees, and you reinvest all distributions. How much will you have in the account at the end of 20 years?
D. You invest $3,000 annually in no-load mutual fund that has a 5 percent exit fee. The fund earns 10 percent annually before fees, and you reinvest all distributions. How much will you have in the account at the end of 20 years?

2. Answer the following:
A. A closed-end investment company is currently selling for $10 and its net asset value is $10.63. You decide to purchase 100 shares. During the year, the company distributes $0.75 in dividends. At the end of the year, you sell the shares for $12.03. At the time of the sale, net asset value is $13.52. What percentage return do you earn on the investment? What role does the net asset value pay in determining the percentage return?
B. A closed-end investment company is currently selling for $10 and you purchase 100 shares. During the year, the company distributes $0.75 in dividends. At end of the year, you sell the shares for $12.03. The commission on each transaction is $50. What percentage return do you earn on the investment?
C. You buy 100 shares in a mutual fund at its net asset value of $10. The fund charges a load of 5.5 percent. During the year, the mutual fund distributes $0.75 in dividends. You redeem the shares for their net asset value of $12.03, and the fund does not charge an exit fee. What percentage return do you earn on the investment?
D. You buy 100 shares in a no-load mutual fund at its net asset value of $10 during the year, the mutual fund distributes $0.75 in dividends. You redeem the shares for their net asset value of $12.03, but the fund charges a 5.5 percent exit fee. What percentage return do you earn on the investment?
E. You buy 100 shares in a no-load mutual fund at its net asset value of $10. During the year, the mutual fund distributes $0.75 in dividends. You redeem the shares for their net asset value of $12.03, and the fund does not charge and exit fee. What percentage return do you earn on the investment?
F. Compare your answers to parts (a) through (e). What are the implications of the comparisons? How would each of the following affect the percentage returns?
• You buy and sell stocks through and online broker instead of a full-service broker.
• You are in the 25 percent federal income tax bracket.
• The distributions are classified as long-term instead of short-term term.
• The purchases and sales occur in your retirement account (e.g., IRA)

1) You work for a company that provides a pension plan to which the company contributes 50 percent of the amount you contribute. For example,

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1) You work for a company that provides a pension plan to which the company contributes 50 percent of the amount you contribute. For example, if you specify that $1000 of your annual salary is to go into the plan, the company will add $500 to make the total contribution $1500 per year. The plan guarantees an annual rate of return of 6%. If you believe you can safely earn 8% per year by investing money yourself, is it worthwhile belonging to the company plan in order to get the company’s $500 contribution each year? Assume that you expect to retire in 30 years and that you will set aside $1000 per year at the end of each of the next 30 years regardless of the plan you choose.

2) A lottery offers the winner the choice between $150,000 cash prize or month-end payments of $1000 for 12 ½ years, increasing to $1500 per month for the next 12 ½ years. Which alternative would you choose if money can earn 8.25% compounded monthly over the 25-year period?

Please help me out!

1. A saver places $1,000 in a certificate of deposit that matures after 20 years and that each year pays 4 percent interest, which is compounded annually until the certificate matures.

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1. A saver places $1,000 in a certificate of deposit that matures after 20 years and that each year pays 4 percent interest, which is compounded annually until the certificate matures.
a) How much interest will the saver earn if the interest is left to accumulate?
b) How much interest will the saver earn if the interest is withdrawn each year?
c) Why are the answers to (a) and (b) different?

2. At the end of each year a self-employed person deposits $1,500 in a retirement account that earns 10 percent annually.
a) How much will be in the account when the individual retires at the age of 65 if the contributions start when the person is 45 years old?
b) How much additional money will be in the account if the individual stops making the contribution at the age 65 but defers retirement until age 70?
c) How much additional money will be in the account if the individual continues making the contribution but defers retirement until age 70?
d) Compare the answers to (b) and (c). What is the effect of continuing the contributions? How much is the difference between the two answers?

3. Graduating seniors may earn $45,000 each year. If the annual rate of inflation is 2 percent, what must these graduates earn after 20 years to maintain their current purchasing power? If the rate of inflation rises to 4 percent, will they be maintaining their standard of living if they earn $100,000 after 20 years?

4. You are offered $900 five years from now or $150 at the end of each year for the next five years. If you can earn 6 percent on your funds, which offer will you accept? If you can earn 14 percent on your funds, which offer will you accept? Why are your answers different?

You are thinking about leasing a car. The purchase price of the car is $33000. The residual value

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You are thinking about leasing a car. The purchase price of the car is $33000. The residual value (the amount you could pay to keep the car at the end of the lease) is $15000 at the end of 36 months. Assume the first lease payment is due one month after you get the car. The interest rate implicit in the lease is 6.75 APR, compounded monthly. What will be your lease payment for a 36 month lease?

For working capital your company has issued $1,500,000 in new bonds. The bonds have a stated 10% coupon rate with 5 annual interest payments of

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For working capital your company has issued $1,500,000 in new bonds. The bonds have a stated 10% coupon rate with 5 annual interest payments of $150,000 due at the end of each year. At the time of issuance they were discounted to yield 12% to the investors, and your company will receive this discounted amount in cash.

(a) Calculate amounts for the new debt issuance and complete the amortization schedule.

(b) Complete the journal entries for the new debt issuance and first interest payment.