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Table 4: Employee #3 Robert Kincaid is 60 years old and works on the line in the distribution center. He has been with Wal-Mart for 15 years and currently earns $40,000 annually. He has not saved any money toward retirement at this point as he could not afford it over the years being married to a non-working spouse with health problems and raising three children. However, he is now 100% debt free having made his last mortgage payment of $500. His only savings is $50,000 in a certificate of deposit at a bank earning 1.5%. He plans to count on social security as his primary source of retirement income but would like to start contributing $500 per month to the 401(k) since he no longer has a mortgage payment. Robert is married with three grown children. His wife never worked and has no retirement funds. He would like to retire at age 65. His risk tolerance is considered low.

Question: Answer:

1.What asset allocation would you recommend Robert make to the available mutual funds in the Wal-Mart 401(k)? Explain your reasoning. Remember the allocation must add up to 100%. (10 points) 2.Robert would like to know about how much money he would have in his 401(k) by age 65? Remember to include the 401(k) matches by Walmart. The return will depend on which funds you choose but use a 4% annual return for purposes of answering this question. Explain all of your math for full credit. (10 points)

Table 4: Employee #13 - Robert Kincaid is 60 years old and works on the line in the distribution center He has been with Wal-Mart for 15 years and currently earns $40,000 annually. He has not saved any! money toward retirement at this point as he could not afford it over the years being married to a non working spouse with health problems and raising three children. However, he is now 100% debt free having made his last mortgage payment of $500. His only savings is $50,000 in a certificate of deposit at a bank earning 1.5%. He plans to count on social security as his primary source of retirement income but would like to start contributing $500 per month to the 401(k) since he no longer has a mortgage payment. Robert is married with three grown children. His wife never worked and has no retirement funds. He would like to retire at age 65. His risk tolerance is considered low. Answer: Question: What asset allocation would you recommend Robert make to the available mutual funds in the Wal-Mart 401(k)? Explain your reasoning. Remember the allocation must add up to 100%. (10 points) Robert would like to know about how much money he would have in his 401(k) by age 65? Remember to include the 401(k) matches by Walmart. The return will depend on which funds you choose but use a 4% annual return for purposes of answering this question. Explain all of your math for full credit. (10 points) Robert doesn't fully understand the concept of an "index" fund. Explain this to him in simple terms. (5 points) Fund Name Beta MS Category MS Rating MS Risk Rating Expense Ratio (net) Avg: Return Best 1-yr Total Return 32.37 % Worst 1-yr Total Return -4.40% Years Up Years Down 1.00 4 star Averag 0.01% | 7 1 4 stars Averag 0.03% N/A 34.78 -9.05% 1.16 6 % 1.29 4 stars average 0.03% N/A 39.02 IN 10.88% Fidelity 500 Index Large Fund (FXAIX) Blend Fidelity Mid-Cap Mid-Cap Index Fund Blend (FSMDX) Fidelity Small Small Cap Index Fund Blend (FSSNX) Fidelity Total Foreign International Large Index Fund Blend (FTIHX) Fidelity Real Real Estate Index Estate Fund (FSRNX) Fidelity US Bond Index Fund Intermed (FXNAX) iate Core Bond 1.01 3 stars Averag 0.06% NA 27.63 14.38% 0.87 2 stars 0.07% N/A Above Averag e 31.58 % -4.21% 7 1.00 5 stars Averag 0.03% NA 8.48% -2.19% 7 NIA o stars | 0.03% NA 4.95% 1.13% 2 n/a Fidelity Short- Term Bond Index Fund (FNSOX Wal-Mart Stock (WMT) Short- Term Bond stock 0.28 Is Table 4: Employee #13 - Robert Kincaid is 60 years old and works on the line in the distribution center He has been with Wal-Mart for 15 years and currently earns $40,000 annually. He has not saved any money toward retirement at this point as he could not afford it over the years being married to a non working spouse with health problems and raising three children. However, he is now 100% debt free! having made his last mortgage payment of $500. His only savings is $50,000 in a certificate of deposit at a bank earning 1.5%. He plans to count on social security as his primary source of retirement income but would like to start contributing $500 per month to the 401(k) since he no longer has a mortgage payment. Robert is married with three grown children. His wife never worked and has no retirement funds. He would like to retire at age 65. His risk tolerance is considered low. Answer: Question: What asset allocation would you recommend Robert make to the available mutual funds in the Wal-Mart 401(k)? Explain your reasoning. Remember the allocation must add up to 100%. (10 points) Robert would like to know about how much money he would have in his 401(k) by age 65? Remember to include the 401(k) matches by Walmart. The return will depend on which funds you choose but use a 4% annual return for purposes of answering this question. Explain all of your math for full credit. (10 points) Robert doesn't fully understand the concept of an "index" fund. Explain this to him in simple terms (5 points) An index fund is a collection of stocks, bonds, or other securities that tracks a market index. Table 4: Employee #13 - Robert Kincaid is 60 years old and works on the line in the distribution center He has been with Wal-Mart for 15 years and currently earns $40,000 annually. He has not saved any! money toward retirement at this point as he could not afford it over the years being married to a non working spouse with health problems and raising three children. However, he is now 100% debt free having made his last mortgage payment of $500. His only savings is $50,000 in a certificate of deposit at a bank earning 1.5%. He plans to count on social security as his primary source of retirement income but would like to start contributing $500 per month to the 401(k) since he no longer has a mortgage payment. Robert is married with three grown children. His wife never worked and has no retirement funds. He would like to retire at age 65. His risk tolerance is considered low. Answer: Question: What asset allocation would you recommend Robert make to the available mutual funds in the Wal-Mart 401(k)? Explain your reasoning. Remember the allocation must add up to 100%. (10 points) Robert would like to know about how much money he would have in his 401(k) by age 65? Remember to include the 401(k) matches by Walmart. The return will depend on which funds you choose but use a 4% annual return for purposes of answering this question. Explain all of your math for full credit. (10 points) Robert doesn't fully understand the concept of an "index" fund. Explain this to him in simple terms. (5 points) Fund Name Beta MS Category MS Rating MS Risk Rating Expense Ratio (net) Avg: Return Best 1-yr Total Return 32.37 % Worst 1-yr Total Return -4.40% Years Up Years Down 1.00 4 star Averag 0.01% | 7 1 4 stars Averag 0.03% N/A 34.78 -9.05% 1.16 6 % 1.29 4 stars average 0.03% N/A 39.02 IN 10.88% Fidelity 500 Index Large Fund (FXAIX) Blend Fidelity Mid-Cap Mid-Cap Index Fund Blend (FSMDX) Fidelity Small Small Cap Index Fund Blend (FSSNX) Fidelity Total Foreign International Large Index Fund Blend (FTIHX) Fidelity Real Real Estate Index Estate Fund (FSRNX) Fidelity US Bond Index Fund Intermed (FXNAX) iate Core Bond 1.01 3 stars Averag 0.06% NA 27.63 14.38% 0.87 2 stars 0.07% N/A Above Averag e 31.58 % -4.21% 7 1.00 5 stars Averag 0.03% NA 8.48% -2.19% 7 NIA o stars | 0.03% NA 4.95% 1.13% 2 n/a Fidelity Short- Term Bond Index Fund (FNSOX Wal-Mart Stock (WMT) Short- Term Bond stock 0.28 Is Table 4: Employee #13 - Robert Kincaid is 60 years old and works on the line in the distribution center He has been with Wal-Mart for 15 years and currently earns $40,000 annually. He has not saved any money toward retirement at this point as he could not afford it over the years being married to a non working spouse with health problems and raising three children. However, he is now 100% debt free! having made his last mortgage payment of $500. His only savings is $50,000 in a certificate of deposit at a bank earning 1.5%. He plans to count on social security as his primary source of retirement income but would like to start contributing $500 per month to the 401(k) since he no longer has a mortgage payment. Robert is married with three grown children. His wife never worked and has no retirement funds. He would like to retire at age 65. His risk tolerance is considered low. Answer: Question: What asset allocation would you recommend Robert make to the available mutual funds in the Wal-Mart 401(k)? Explain your reasoning. Remember the allocation must add up to 100%. (10 points) Robert would like to know about how much money he would have in his 401(k) by age 65? Remember to include the 401(k) matches by Walmart. The return will depend on which funds you choose but use a 4% annual return for purposes of answering this question. Explain all of your math for full credit. (10 points) Robert doesn't fully understand the concept of an "index" fund. Explain this to him in simple terms (5 points) An index fund is a collection of stocks, bonds, or other securities that tracks a market index

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