Question

25. What does the 4% rule recommend?

a) in the first year of retirement, withdraw 4% of your account balance. In the following years, withdraw that same amount plus a little extra to adjust for inflation.

b) assume a 4% return when making retirement projections.

c) each year in retirement, withdraw an inflation-adjusted 4% of last year’s account balance each year.

26. Money in a 401K account tends to be safe when its owner is threatened by a lawsuit.

a) True

b) False

27. When bond prices fall, interest rates (i.e. bond yields)

a) Fall

b) Rise

c) there is no consistent relation between bond prices and bond yields

28. When expected inflation rates for the future increase, interest rates tend to

a) remain the same

b) Increase

c) Decrease

Answer 1

Solution 25