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Alsson and Lestie, who are twins, just reveived $25,000 each for their 29 th birthday. They both have aspirations to become malianaires. Each plans to

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Alsson and Lestie, who are twins, just reveived $25,000 each for their 29 th birthday. They both have aspirations to become malianaires. Each plans to make a $5, o00 annual contribution to her "early retirement fund" on ber birthday, beginning a year from todoy. Allison opened an account with the Salety First Bond 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 Blo-fech Fund, which invests in small, newly issued bio-tech stocies and whose investors have eamed an average of 13% per year in the fund's relatively 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. Round your answers to two decimal places. Ailison:Lestie:yeersyears b. How large would Amigon's annusi contributions have to be for her to become a millionaire at the same age as lestie, assuming their expected returns are realized? Do not round intermediate calculations. Mound yout answer to the nearest cent: 1 c. Is it rational or irrational for Aliison to invest in the bond fund rather than in stocks? 1. High expected retums in the market are almost always accompanied by a lot of risk. We couldnt tay whether Alticon is rational or ifrational, just that she seems to have less tolerance for risk than Levie does. 11. High expected returns in the market are aimost always accompanied by less risk. We coulde't say whether Allison is rationat or irrationali, fust that she seems to have more tolerance for risk than Leslie does. III. High expected returns in the market are almost elways accompanied by a lot of risk. We couldnt say whecher Alson is rational or ifrational, Just that she seems to have moce tolerence for risk than Lestie does. TV. High expected returns in the maket are aimost always accompaned by less risk, We couldnt say whether Allison is rational or irrational, just that she seemis to have less tolerance for risk than Lestive does. V. High expected returns in the market are almest alwoys accompanied by a lot of rick, We couldin't say whether Allison is ratiocat of irrational, gust that she seems to have abous the same tolerance for risk than Leslie does

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