Yea that was confusing to me as well…and I speak English lol. What I was confusing was when the say required return for the coming year - taking it to mean, what does the portfolios have to earn in the coming year (which would be to meet next year’s needs). But what it’s asking are what return is required to meet the coming year’s needs/expenses.
“Thomas sold his consulting business at year-end and retired” < - year has just ended and we’re rolling into a new year and in the year which just ended, expenses were 300,000, so for the coming approaching year, * 1.025 …
This seems clear to me now but 2005 AM is a total mess.