CTP · Question #802
(Topic 9) An employee is considering two investment strategies for his 401(k) plan: Strategy #1: Invest all contributions in a money market fund that has returned 5% annually Strategy #2: Invest all…
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Question
- (Topic 9)
An employee is considering two investment strategies for his 401(k) plan:
Strategy #1: Invest all contributions in a money market fund that has returned 5% annually Strategy #2: Invest all contributions in a stock fund that has returned 9% on average, although annual returns have varied between (2%) and 12% Assuming that the employee makes a one-time investment of $12,000 and that both strategies continue to perform as they have historically, how much more or less could the stock fund be worth after one year compared to the money market fund?
Options
- ABetween ($480) and $480
- BBetween ($840) and $840
- CBetween ($1,080) and $1,080
- DBetween ($1,680) and $1,680
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