Choose the Word or Phrase in [ ] Which Will

question 3

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-You can offset the effects of earning a lower rate of return by [?increasing the amount you invest each year | ?shortening the period over which you build up your retirement account].

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Definitions:

Systematic Factors

Factors that affect the entire market or a large segment of the market, such as economic, political, or social changes.

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period, eroding purchasing power.

Lintner

Lintner refers to John Lintner, an economist known for his work on the dividend policy of firms and contributions to the capital asset pricing model (CAPM).

Miller and Scholes

Refers to Merton Miller and Myron Scholes, economists recognized for their work in finance, including the development of the Black-Scholes model for option pricing.