Question: I need a report done on this assignment John Morrow is ten years away from retirement. He has accumulated a $100,000 nest egg that he
I need a report done on this assignment
John Morrow is ten years away from retirement. He has accumulated a $100,000 nest egg that he would like to invest for his golden years. Furthermore, he is confident that he can invest $10,000 more each year until retirement He is curious about what kind of nest egg he can expect to have accumulated at retirement ten years from now. John plans to split his investments evenly among four investments: a Money Market Fund, a Domestic Stock Fund, a Global Stock Fund, and an Aggressive Growth Fund. Based on past performance, John expects each of these funds to earn a return in each of the upcoming ten years according to the distributions shown in the following table. Fund Distribution Money Market Uniform (Minimum = 2%, Maximum = 5%) Domestic Stock Normal (Mean = 6%, Standard Deviation = 5%) Global Stock Normal (Mean = 8%, Standard Deviation = 10%) Aggressive Growth Normal (Mean = 11%, Standard Deviation=16%) Assume that the initial nest egg ($100,000) and the first year's investment ($10,000) are made right now (year 0) and are split evenly among the four funds (i.e, $27,500 in each fund). The returns of each fund are allowed to accumulate (i.e., are re-invested) in the same fund and no redistribution will be done before retirement. Furthermore, nine additional investments of $10,000 will be made and split evenly among the four funds ($2,500 each) at year 1, year 2... year 9. A financial advisor has told John that he can retire comfortably if he can accumulate $300,000 by year 10 to supplement his other sources of retirement income. Use a 1000-trial Analytic Solver simulation to estimate each of the following. Here is what I will be looking for: a. What will be the expected value (mean) of John's nest egg at year 10? b. What will be the standard deviation of John's nest egg at year 107 What is the probability that the total nest egg at year 10 will be at least $300,000? d. The results of a 1000-trial simulation run (should be a cut/paste of your distribution). C
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