A mutual fund has 1,000 shares of Doggie Corp. currently trading at $10, and 500 shares of Kitty, Inc., currently trading at $15. The fund has 2,000 shares outstanding. Investors expect the price of Doggie Corp. to increase to $14 and the price of Kitty Inc. to decline by the end of the year. Thus a new NAV. Assume that the price of Doggie Corp. shares is realized at $14. What is the maximum price to which Kitty Inc. can decline and still maintain the original NAV?

a.7 b. 15.45 c.8.75 9. 12.45

Mary has just been employed by DSD Corp. She has a choice between a flat benefit at retirement equal to $3,000 times her years of service, or a career average formula of 4.50% of her average salary times her years of service. Mary expects to work 30 years. At what average salary would she be indifferent between the two alternatives?

a. 36666.67

b. 66666.67

c.46666.67

d.56666.67