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Allison and Leslie, who are twins, just received $50,000 each for their 22th birthday. They both have aspirations to become millionaires. Each plans to make

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Allison and Leslie, who are twins, just received $50,000 each for their 22th birthday. They both have aspirations to become millionaires. Each plans to make $5,000 annual contribution to her early retirement fund on her birthday, beginning a year from today, Allison opened an account with the Safety First Band Fund, a mutual fund that invests in high-quality bonds whose investors have earned 6% per year in the past. Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued blo-tech stocks and whose investors have earned an average of 16% per year in the fund's mlatively short history, a. If the two women's funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire? Do not round intermediate calculations. Rehind your answers to two decimal places. Allison: years Leslie: years b. How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming their expected returns are realized? Do not round Intermediate calculations. Round your answer to the nearest cent. c. Is it rational or irrational for Allison to invest in the bond fund rather than in stocks? 1. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Alison is rational irration, at that she seems to have less tolerance for risk than Leslie does. II. High expected returns in the market are almost always accompanied by less risk. We couldn't say whether Altson a national or maton, just that he seems to have more tolerance for risk than Leslie does. III. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Alison is rational or motional, just that the seems to have more tolerance for risk than Leslie does IV. High expected returns in the market are almost always accompanied by less risk. We couldn't say whether Alison de rational e irration, just that he seems to have less tolerance for risk than Leslie does. V. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Alison is rational or irratia, funt that she seems to have about the same tolerance for risk than Leslie does. -Select- Check My Work

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