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Consider two funds that start with $1,000 and have retums as shown below. Fund #1 Return Year Beg Bal $ Retum Withdrawal End Bal -12.9%

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Consider two funds that start with $1,000 and have retums as shown below. Fund #1 Return Year Beg Bal $ Retum Withdrawal End Bal -12.9% 1 1000 0 12.9% 2. 0 -18.3% 3 . 0 15.8% 0 15.0% 5 0 Fund #2 Return -18.9% Year $ Retum End Bal Beg Bal 1000 Withdrawal 0 18.9% 2. 0 -26.8% 3 0 23.2% 4 0 23.0% 5 0 Step 1. Fill in each table. For instance, the "S Return" for Fund #1 for the first year would be $129.0000 (which is -12.90% of that year's beginning balance.) Hint: the Ending Balance on the last row of teach table should be almost.identical within a dollar of each other), Step 2. Redo both fables, but this time assume a withdrawal of $149 on each row. This would be like an investor withdrawing funds from his retirement in order to pay his living expenses. Note that the returns for Fund #2cire more volatile thon Fund I. Will this matter to the investor Volatility continued Fund #1 Return -12.9% End Bal $ Retum Year 1 Beg Bal 1000 Withdrawal 149 12.9% 2 149 -18.3% 3 149 149 15.8% 4 15.0% 149 5 S Fund #2 Return -18.9% End Bal $ Return Beg Bal Year 1 Withdrawal 149 1000 18.9% 2 149 149 26.8% 3 149 23.2% 23.0% 149 5 Step 3. Using the tables from Step 2. please compare the Ending Balance on the last row (Year 5) of each table. How much less is Fund I2s Ending Balance for Year 52 A Between 20 and 37 B Between 37 and 50 C Between 50 and 61 D Between 6 and 75

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