Attractive Features of a 401(k)plan Can Include

question 124

Multiple Choice

Attractive features of a 401(k) plan can include

• A)guaranteed investment return and tax deferral.
• B)tax deferral and liquidity.
• C)liquidity and matching contributions.
• D)matching contributions and tax deferral.
• E)tax deferral and liquidity

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Definitions:

Interest Rates

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.

Nominal Rate

The interest rate set by the lending institution, not adjusted for inflation, representing the actual yearly cost of funds over the term of a loan.

Compounding Period

The period of time after which interest is credited to the depositor’s account for purposes of computing subsequent interest.

Interest Rate

The percentage charged on a loan or paid on savings over a specific period, usually expressed as an annual percentage of the principal.