(a) Laura Smith is planning for her and her husband Luke's retirement. Luke and Laura, born on the same date, expect to retire in 30 years (when they both turn 65). The life expectancy of men is 78 years and the life expectancy of women is 87 years (i.e., assume that they die the day before their 78th or 87th birthday). During retirement (while they are living), the couple wants to withdraw $25,000, for each of them, at the beginning of each year from their savings account. Assume that the interest rate during their retirement is 12 percent compounded semi- annually; the interest rate after Luke dies is 13 percent compounded annually; and, the interest rate, prior to retirement, is 8 percent compounded annually. How much will they have to deposit in their joint savings account (combine Luke and Laura) each month (beginning one month from now and ending on their retirement date)?

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.