Round your answer to 2 decimal places._______ Screen shot your Desmos calculations for full credit.
Antonina goes on Wheel of Fortune and wins $12,000 after taxes. She decides that she will invest this money with the goal of putting a $20,400 down payment on a house. She puts the money in a mutual fund that has had a historical return of 7.5%.
5
7
Question 26
26.
Sketch the graph of the exponential function
in desmos and screen shot your picture and paste in show your work.
As x gets large, y →_______
As x gets small, y → _______
Asymptote: y = _______
Solve for x: 2 ·4^x +7=135
x=2
x=3
x=4
x=5
The data points below represent the total assets invested in index funds in the US each year since 1993. Analyze the results of the exponential regression model shown. Which of the following statements is true?
A linear regression model would likely have a higher r^2 value
The assets managed by index funds have grown by approximately 14.91% per year
The model is not a good fit for the data points because the r^2 value is close to 1
The model predicts that US index funds will manage approximately $1.7 trillion in assets in 2023
Which of these functions has an asymptote at y = 2?
a
b
c
d
Look at the graph. Which of the four functions has the smallest value for b (Hint: Smallest Growth Factor)?
a
b
c
d
Evaluate
3
4
10
27
Kendall completed her med school training 10 years ago and is now a successful highly-paid surgeon at a major hospital. What type of account would be most beneficial for Kendall to use to start saving for retirement, so she can enjoy time off after a stressful career?
A regular brokerage account, because tax advantages don’t matter that much
A Roth IRA, because she can pay taxes on the money now and take it out tax-free later
Social Security, because she will pay into it throughout her career
A traditional 401(k), because it will reduce her taxable income now
Each of the following factors impacts how much money you will have available at retirement EXCEPT…
How often you log into your online brokerage account
What percent of your income you invest each month
How old you are when you start investing
Whether you qualify for Social Security benefits
Ash remembers learning about both 401(k)s and IRAs in his personal finance class during high school. He’s early in his career, and he can really only afford to fund one type of account with about $100 per month right now. What should he do?
Fund a 401(k) because his employer is offering a match, up to 3% of his salary
Fund a savings account, because it will guarantee an interest rate, rather than leaving his retirement up to a risky investment option
Fund neither account, because $100 does not meet the minimum requirements for any retirement account type
Fund a traditional IRA, because it will offer him, by far, the best tax advantages
Which type of fund is usually passively managed, can be traded throughout the day, and is bought directly from other investors like a stock?
Target date fund (TDF)
Robo-advisor
Exchange-traded fund (ETF)
Mutual fund
If you invest money into an index fund that tracks the Dow Jones Industrial Average, you would expect…
To outperform most other investors because of the elite status of this index
Your fund manager to contact you on a regular basis with suggestions on whether to buy or sell
A lot of high fees, because there are only 30 companies in that index
Your returns to track the performance of 30 large US companies
Which fund will most working American citizens have access to at retirement?
Social Security
A pension plan
A traditional IRA
A Roth IRA
Alma recently started investing in a target-date fund with a planned retirement date that is 38 years in the future. How is the portfolio in her TDF most likely allocated?
Half stocks and half bonds
Her TDF allocation will depend on the specific securities she selects
Majority bonds and a small percentage of stocks
Majority stocks and a small percentage of bonds
Alberto has decided to invest his retirement money into a mutual fund filled with mid-sized US companies. The fund manager is…
A CEO at one of those midsize companies
The person who selects which stocks to include in the fund
The website where Alberto logs in to check his fund’s value
The budgeting software Alberto uses to make sure he has enough saved every month
The S&P 500 is…
An index of the 500 largest publicly-traded companies in the world
An index of the 500 largest publicly-traded companies in the US
An actively managed mutual fund
A diverse collection of stocks and bonds
All of the following are true about robo-advisors, EXCEPT…
Robo-advisors generally invest your portfolio based on your goals and risk tolerance
Robo-advisors use an algorithm to automate the investing process
Robo-advisors generally have lower fees than a traditional financial advisor
Robo-advisors generally have a higher account minimum than a traditional financial advisor
All of the following are factors to consider when opening a brokerage account EXCEPT
The location of the brokerage company
Who will manage the account
Your investing goals
Fees that will be charged
Which statement about the investment fees associated with mutual funds is true?
Fees are typically set at 10 to 15%, annually, of the amount you have invested
Fees, compounded over the life of your investment, can substantially decrease your returns
You’ll only pay fees to your fund manager if your portfolio has a return over 5%
You’ll pay a one-time fee when you start your investment portfolio with a mutual fund
In 2022, Noah decided to start investing in a target-date fund at Alpine brokerage. They are 24 years old, have been working for 5 years, and are planning on retiring at 67. Which target-date fund should they choose?
Alpine Target Retirement 2060 Fund
Alpine Target Retirement 2065 Fund
Alpine Target Retirement 2070 Fund
Alpine Target Retirement 2075 Fund
Zora has $5,000 to invest. When assessing her goals, she decides that she wants to create a low-risk, low-volatility portfolio. Based on this assessment, a good strategy for Zora would be:
Lump Sum Investing
After Tax Averaging
Dollar-Cost Averaging
Average Paycheck Investing
Which of the following is an example of the bias of Chasing Trends?
Buying stock in an industry that is not represented in your portfolio to increase diversity
Researching the long term growth strategy of a company
Buying cryptocurrency because you saw a headline about it reaching its highest price ever
Buying a stock when it has hit its lowest price of the year
Question 21
21.
The data points represent a fund’s prices over time. Based on the exponential regression model…
a. Write the equation for the fund’s predicted price after x years. Round to the nearest hundredth._______
b. Based on the model, predict the fund’s approximate price after 6 years. Show your work or explain your reasoning and screen shot your caclulations if you use Desmos. _______
Question 22
22.
Is this model a good fit for the data? Why or why not?
Question 24
24.
Write an exponential equation that represents Antonina’s investment where x represents years and f(x) represents her investment after x years. Assume the mutual fund earns a 7.5% annual rate of return._______
Question 25
25.
Calculate how long it will take to reach her investment goal.
Round to 2 decimal places. Screen shot your desmos calculations for full credit.