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| Teaching Since: | May 2017 |
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MBA (IT), PHD
Kaplan University
Apr-2009 - Mar-2014
Professor
University of Santo Tomas
Aug-2006 - Present
Please show how you arrive at answer. Due 3/3/17
1.     Ms. Lloyd, who is 25 and expects to retire at age 60, has just been hired by the Chambers Corporation. Ms. Lloyd's current salary is $30,000 per year, but her wages are expected to increase by 5 percent annually over the next 35 years. Chambers has a defined benefit pension plan in which workers receive 2 percent of their final year's wages for each year of employment.
Assume a world of certainty. Further, assume that all payments occur at year-end. What is Ms. Lloyd's expected annual retirement benefit, rounded to the nearest thousands of dollars? a. $35,000
b.     $57,000
c.     $89,000
d.     $116,000
e.     $132,000
2.     Kumar Consulting operates several stock investment portfolios that are used by firms for investment of pension plan assets. Last year, one portfolio had a realized return of 12.6 percent and a beta coefficient of 1.15. The average T-bond rate was 7 percent and the realized rate of return on the S&P 500 was 12 percent. What was the portfolio's alpha?
a.     −0.75%
b.     −0.15%
c.     0%
d.     0.15%
e.     0.75%Â
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