You are a new employee with the Metro Daily Planet. The Planet offers three diff

Question

You are a new employee with the Metro Daily Planet. The Planet offers three different retirement plans. Plan1 starts the first day of work and puts $1,500 away in your retirement account at the end of every year for 40 years. Plan 2 starts after 10 years and puts away $3,000 every year for 30 years. Plan 3 starts after 20 years and puts away $5,000 every year for the last 20 years of employment. All three plans guarantee an annual growth rate of 12.5%. Which of the following factors affect the future value of the retirement account? OA. Duration of the retirement account contributions. O B. Rate of return on the retirement account. O C. All of the above O D. Size of the retirement contributions.

Explanation / Answer

Question 1:

Future value of retirement account will be affected by duration, Rate of return, Size of contribution etc...

So the answer is All of the Above.

Question 2:

The Selling price of the stock will not affect the holding period return as it has no relevance in calculating the return.

So the answer is Option C.(Selling price of stock)  

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