tax exempt>tax defer schweser V1 third afternoon Q56

CFA Level III
#1

Schweser practice V1 third afternoon, p200 Q56, it says tax-exempt and tax

Deferred does not matter, my answer is tax exempt, because it says flat and heavy, capital gain will be heavy, and if using tax exempt, they pay less tax , if they use deferred account, the share price will increase higher and higher after

Many years till the person retires, so end up paying more tax.

So it does matter to choose tax exempt

#2

flat means everyone pays the same income tax doesnt matter how much you earn. so T0 = T1, and when that is the case you are indefferent between deffered and exempt.

#3

TDA = [1 + r]^n * (1 - Tn)

TEA = (1 - To)[1 + r]^n *

Flat means = T0 = T1 So indifferent between TDA and TEA