Same ten returns, same averages, one bad year in four positions: the MT423 sequence risk illustration for Unit 9 follows a composite retiree's money from 65 to 95 for each. Searches like "mt 423 unit 9 assignment example", "mt423 unit 9 sample" and "mt423 unit 9 example" land here.
What a finished MT423 Unit 9 sequence risk illustration looks like
Four pages, carrying a single chart and a results table. Inputs come first: 936,000 at 65, withdrawals of 62,000 at 65 and 66, falling to 30,200 once a bracketed Social Security benefit begins at 67, all in today's dollars, taken at the start of each year. Ten real returns are used in every run, nine of 5.0 percent and one of minus 20.0, so the arithmetic and compound averages never change. With the loss in year one, the balance reaches about 685,704 at 75 and 332,871 at 95. Placed in year three, 719,228 and 387,804. In year six, 748,159 and 435,211. In year ten, 780,700 and 488,534. After 75 each run continues at a flat 2.5 percent real. The chart overlays all four paths.
How a MT423 Unit 9 example is structured
The illustration isolates timing by holding everything else fixed, and says so in its first paragraph. The return set is listed once, with both averages computed, so no reader can attribute the differences to return. Withdrawal mechanics are stated precisely: amounts, timing within the year and the step down when the benefit starts. Four runs follow, placing the loss in years one, three, six and ten, chosen to show the effect fading as the loss moves later. The mechanism gets its own paragraph: an early loss hits the largest balance just as the heaviest withdrawals, the two bridge years, sell shares at depressed prices, leaving less to recover. The results table reports balances at 75 and 95. A final section connects the finding to design choices made earlier in the term, the lower stock share at 65 and the bond reserve for the bridge years.
One variable moved
Ten fixed real returns, nine gains of 5.0 percent and one loss of 20.0, with identical averages shown before any run.
Withdrawals stated exactly
62,000 at 65 and 66, then 30,200, drawn at the start of each year in today's dollars.
Four placements, four outcomes
Balances at 95 of about 332,871, 387,804, 435,211 and 488,534 as the loss moves from year one to year ten.
Why early costs more
Heavy bridge-year withdrawals sell into the decline, shrinking the base that later gains compound on.
Links to the design
The lower stock share at retirement and the bond reserve for the first two years, read as responses to this result.
Where marks go in MT423 Unit 9
Illustrations that compare two runs with different average returns confuse sequence with return and undo the demonstration, so graders usually check that the return set is identical before anything else. Withdrawal timing left unstated makes results impossible to reproduce. Papers that show the effect without explaining the mechanism, withdrawals drawn from a fallen balance, leave the grader with a chart and no argument. Ignoring the change in withdrawals when Social Security begins misses what makes this client's early years more exposed than a flat-withdrawal example suggests. Nominal and real figures mixed across runs draw comment. Much also depends on connecting the result to decisions; an illustration that ends on the observation that order matters, without saying what the plan does about it, stops a step short.
Get a MT423 Unit 9 example written to your instructions
Sequence illustrations turn on the client's withdrawals and starting balance, both set by the Unit 9 case. A first custom MT423 version built on them is free, with identical return sets, precisely stated withdrawals and a chart of every run, to the rubric. Expect it in 24-48h; historical sequences can replace composite ones where the prompt requires.
MT423 Unit 9 questions, answered
Should the illustration use historical returns or made-up ones?
Either works if handled honestly. Composite returns make the point cleanly because averages can be held identical by construction. Historical sequences, such as retiring in 1966 versus 1982, are vivid but differ in average return too, so the paper must separate the sequence effect from the return difference before drawing any conclusion.
Is a Monte Carlo simulation required?
Rarely for this unit. A deterministic illustration shows the mechanism far more clearly, which is what most prompts ask for. If a simulation is included, report the distribution of outcomes and explain that it blends sequence and return effects, since random paths differ in both, and name the number of trials and the return assumptions behind them.
Why do withdrawals before Social Security matter so much?
Because they are the largest withdrawals and they come first. A loss in those years forces the portfolio to sell more shares at lower prices to fund the same spending. When the benefit arrives the withdrawal drops, but the damage from the early sales stays in the balance for good.