Relative to a drawdown plan that is based upon an individuals life expectancy, if an individual only spends the real returns on their financial assets, their income will be: | A) | larger, and the remaining estate will also be larger. |
| | B) | larger, but the remaining estate will be smaller. |
| | C) | smaller, and the remaining estate will be smaller. |
| D) | smaller, but the remaining estate will be larger. |
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Answer and Explanation
If an investor only spends the real returns on assets held, their income will be smaller than a plan based upon life expectancy. This is because a plan based upon life expectancy will also result in a drawdown of principal. However, since only the real returns are spent, the remaining estate will be larger than any plan that also draws down principal.
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发表于 2008-9-17 12:04
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