1. You realize that, even though you have been contributing the maximum to your 401(k), you will not have enough money to ensure you have a comfortable retirement. What can you do?
A. Choose a higher risk investment portfolio.
B. Contribute to a Roth IRA in addition to your 401(k).
C. Purchase an annuity.
D. All of the above may be worthwhile.
2. Selecting, buying, and selling stocks, bonds, and other financial instruments are important to personal financial planning. The Wilson Family has been investing $2,000 annually in an IRA for the past 6 years, which is invested in a portfolio of mutual fund. The average return on stocks since 1926 has been about 10%. How much will the IRA be worth in 7.2 Years?
A. $16,974
B. $33,949
C. $53,439
D. None of the above.