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1) Assume your income over the last year was $50,000, grows at 10% for 30 years, and that it is a relatively risky job so
1) Assume your income over the last year was $50,000, grows at 10% for 30 years, and that it is a relatively risky job so a 5% discount rate is warranted (this is still considered bond-like risk/returns). Also, assume that you will have $200,000 saved by the end of 10 years, with the return on your investment of 12% per year since you invest in all equities. What is your allocation to equity today considering your financial and human capital? 1.89% 25.00% 28.57% 64.84% 100.00%
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