Number of years taken by Person A and Person L to become millionaires if both earn the same return. Financial Goal: Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

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Answer 1

Question

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

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Students have asked these similar questions

Jeff Krause purchased 1,000 shares of a speculative stock in January for $1.89 per share. Six months later, he sold them for $9.95 per share. He uses an online broker that charges him $10.00 per trade. What was Jeff's annualized HPR on this investment? Jeff's annualized HPR on this investment is %. (Round to the nearest whole percent.)

Congratulations! Your portfolio returned 16.7% last year, 2.5% better than the market return of 14.2%. Your portfolio had a standard deviation of earnings equal to 18%, and the risk-free rate is equal to 4.4%. Calculate Sharpe's measure for your portfolio. If the market's Sharpe's measure is 0.29, did you do better or worse than the market from a risk/return perspective? The Sharpe's measure of your portfolio is (Round to two decimal places.)

On January 1, 2020, Simon Love's portfolio of 15 common stocks had a market value of $258,000. At the end of May 2020, Simon sold one of the stocks, which had a beginning-of-year value of $26,900, for $31,400. He did not reinvest those or any other funds in the portfolio during the year. He received total dividends from stocks in his portfolio of $11,900 during the year. On December 31, 2020, Simon's portfolio had a market value of $246,000. Find the HPR on Simon's portfolio during the year ended December 31, 2020. (Measure the amount of withdrawn funds at their beginning-of-year value.) Simon's portfolio HPR during the year ended December 31, 2020, is %. (Round to two decimal places.)

Answer 2

Question

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Expert Solution & Answer

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Answer 3

Question

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 6

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 7

Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by Person A and Person L to become millionaires if both earn the same return.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 8

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 9

b.

Summary Introduction

To calculate: Person A’s contribution to become millionaire at the same age of Person L.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 10

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 11

c.

Summary Introduction

To explain: Whether it is rational or irrational for Person A to invest in the bond fund rather than in stocks.

Financial Goal:

Financial goal is a money based target which a person wants to achieve by the certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing the amount of tax.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author calculates the number of years taken by Person A and Person L to become millionaires if both earn the same return.

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