Determining value of your retirement plan


1) Suppose that you contribute= $400 per month to = retirement plan for= 25 years. Then you are able to rise the contribution to= $800 per month for another 25 years. Given 8% interest rate, determine value of your retirement plan after 50 years?

2) Which of given sources of market inefficiency would be most simply exploited?

a) A stock price drops suddenly due to the large block sale by the institution

b) A stock is overpriced as traders are restricted from short sales.

c) Stocks are overvalued as investors are exuberant over increased productivity in economy.

3) Which of the given most appears to disagree with proposition that stock market is weakly efficient? Describe in detail.

a) Over 25% of mutual funds outperform market on average.

b) Insiders earn abnormal trading profits.

c) Every January, the stock market earns abnormal returns.

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Finance Basics: Determining value of your retirement plan
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