Questions: Select all that apply Systematic withdrawals from a mutual fund may be made: by withdrawing a fixed percentage of the asset growth each period. in a specific dollar amount each investment period. by withdrawing in full of all assets in the investment account for each period. by selling off a specific number of shares each investment period.

Select all that apply
Systematic withdrawals from a mutual fund may be made:
by withdrawing a fixed percentage of the asset growth each period.
in a specific dollar amount each investment period.
by withdrawing in full of all assets in the investment account for each period.
by selling off a specific number of shares each investment period.
Transcript text: Select all that apply Systematic withdrawals from a mutual fund may be made: by withdrawing a fixed percentage of the asset growth each period. in a specific dollar amount each investment period. by withdrawing in full of all assets in the investment account for each period. by selling off a specific number of shares each investment period.
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Answer

The answers are:

  • by withdrawing a fixed percentage of the asset growth each period.
  • in a specific dollar amount each investment period.
  • by selling off a specific number of shares each investment period.
Explanation
Option 1: By withdrawing a fixed percentage of the asset growth each period.

This is a common method of systematic withdrawal where an investor withdraws a fixed percentage of the growth in the asset value. This allows the investor to benefit from the growth while maintaining the principal investment.

Option 2: In a specific dollar amount each investment period.

Investors can choose to withdraw a fixed dollar amount at regular intervals. This method provides a predictable income stream, but the investor must be cautious of depleting the principal if the withdrawals exceed the growth of the investment.

Option 3: By withdrawing in full of all assets in the investment account for each period.

This option is not typically considered a systematic withdrawal method. Withdrawing all assets each period would deplete the account quickly and is not sustainable over time.

Option 4: By selling off a specific number of shares each investment period.

This method involves selling a predetermined number of shares at regular intervals. It allows the investor to manage the withdrawal amount based on the current share price, providing flexibility in managing the investment account.

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