1. Determine your required inflation-adjusted annual (pretax) income at age 65. Assume that this annual amount remains constant from age 65 to age 80.
2. Determine the amount you must accumulate by age 65 to meet your retirement goal, assuming that you invest in
a. Common stocks
b. Corporate bonds
c. Equally weighted portfolio (50 percent common stocks, 50 percent bonds)
3. Determine the annual investment in common stocks required to accumulate the funds determined in question 2, assuming that the first payment is made at age
a. 30
b. 40
c. 50
4. Determine the annual investment in corporate bonds required to accumulate the funds determined in question 2, assuming that the first payment is made at age
a. 30
b. 40
c. 50
5. Determine the annual investment in an equally weighted portfolio (50 percent common stocks, 50 percent bonds) required to accumulate the funds determined in question 2, assuming that the first payment is made at age
a. 30
b. 40
c. 50
6. What conclusions can be drawn from the answers to questions 3, 4, and 5?