1. A well-defined IPS should include of the following, EXCEPT:
A) Investment strategy and asset allocations
B) How much should be invested
C) Definition of duties and objectives
D) Purpose and scope
2. A company wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $21,000 per month for 30 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 15 years at an estimated cost of $728,000. Third, after he passes on at the end of the 30 years of withdrawals, he would like to leave an inheritance of $600,000 to his nephew Frodo. He can afford to save $2,100 per month for the next 15 years.
If he can earn a 11 percent EAR before he retires and a 10 percent EAR after he retires, how much will he have to save each month in years 16 through 30?
$3,724.34
$3,876.35
$3,800.34
$4,833.18
$5,389.20