Schweser Mock Exam 1 always, separate, required, first

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Questions for those who took exam 1.
1. Individual portfolio mgmt.
The answer calculated Allison’s medicare expense at 1.05 for the first year. However, it just add the inflation rate (2%) to the real return.
From my understanding, the Medical expense will go up 5% each year, not just 2%. Should we separate the Medical from the living expense? what i did is add 5% to the med expense requirement and 2% to the living expense and got around 6.5% required return.
I always spent too much time in calculating the return because if it is incorrect it may affect the questions later. For this question C. I excluded choice D first because it doesn’t meet the required return i got…
And what if the choice is between the geometric return and simply added the spending rate and inflation rate? It says both are accepted. but if the choice meeting the simple return not geometric return should we choose it?
2. Institutional portfolio mgmt.
The answer says “should not be afraid to state the obvious, even when it means more or less repeating what is stated in the vignette”. I am so afaid of doing this, it looks so stupid.
3. Equity portfolio mgmt. (it is not on the mock exam but i would like to ask here).
Schweser says “historical data suggests that active mgmt on average doesn’t ourperform passive mgmt after consideration of expenses”. Then why bother with active investment.