9.) An individual investor made $35,000 in after tax income last year (where the cash flow was just made at T=0). The investors after tax income will grow at 2.0% per year and should be discounted at 6.0%. The individual investor just turned 40 and is planning to retire in 25 years with $750,000 of financial capital. The return objective for the financial capital will be achieved by investing in equities (70%) and bonds (30%); equities should return 15.0% per annum while bonds should return 5.0% per annum. The investors retirement account is tax exempt. The investors Total Capital today (T=0) is closest to:

A.) $551,334

B.) $595,451

C.) $639,569

D.) $664,673

E.) $936,617

12.) Today is T=0. A client is willing and able to take on any level of risk. You expect a stronger USD will cause developed markets to outpace emerging markets believe that stocks with a low valuation multiple (e.g. P/S, P/B, P/E) are priced attractively compared to stocks with a high valuation multiple. From a fund of funds perspective, your most prudent decision based on information about the client and Factors X & Y (at T=0) would be to allocate the majority of the capital to:

A.) Portfolio Manager A

B.) Portfolio Manager B

C.) Portfolio Manager C

D.) Portfolio Manager D

E.) Portfolio Manager E