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Question 1 of 10
1. Question
Which is (are) the following statement(s) true about traditional IRA?
I. The most common type of IRA account is the tax-qualified traditional IRA.
II. Investors who do not wish to take the tax deduction of contributions may choose to invest in a traditional IRA.
III. Clients in low tax brackets, for instance, may prefer to take advantage of the tax-free withdrawals at retirement a traditional IRA offers.
IV. Traditional IRA s have fewer qualifiers than Roth IRAs.Correct
The most common type of IRA account is the tax-qualified traditional IRA.
Incorrect
The most common type of IRA account is the tax-qualified traditional IRA.
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Question 2 of 10
2. Question
Which is (are) the following statement(s) true about Roth IRA?
I. Roth IRAs are not retirement accounts at all.
II. Roth IRAs have fewer qualifiers than Traditional IRAs.
III. In Roth IRAs, contributions are not deductable.
IV. In Roth IRAs, withdrawals are entirely tax-free.Correct
In Roth IRAs
•Contributions are not deductable.
•Withdrawals are entirely tax-free.
Roth IRAs have fewer qualifiers than Traditional IRAs.Incorrect
In Roth IRAs
•Contributions are not deductable.
•Withdrawals are entirely tax-free.
Roth IRAs have fewer qualifiers than Traditional IRAs. -
Question 3 of 10
3. Question
Which is (are) the following statement(s) true about Simplified Employee Pensions (SEP)-IRAs?
I. Simplified Employee Pensions (SEP)-IRAs are retirement plans for self-employed individuals.
II. Simplified Employee Pensions (SEP)-IRAs are retirement plans for those working for small-business employers without traditional retirement plans.
III. An SEP-IRA allows the employer to make tax-deductable contributions of up to 25 percent of the employee’s annual income (up to $45,000; adjusted to cost of living) to the account.
IV. An SEP-IRA allows the employer to make tax-deductable contributions of up to 15 percent of the employee’s annual income (up to $45,000; adjusted to cost of living) to the account.Correct
Simplified Employee Pensions (SEP)-IRAs are retirement plans for self-employed individuals, or those working for small-business employers without traditional retirement plans. An SEP-IRA allows the employer to make tax-deductable contributions of up to 25 percent of the employee’s annual income (up to $45,000; adjusted to cost of living) to the account.
Incorrect
Simplified Employee Pensions (SEP)-IRAs are retirement plans for self-employed individuals, or those working for small-business employers without traditional retirement plans. An SEP-IRA allows the employer to make tax-deductable contributions of up to 25 percent of the employee’s annual income (up to $45,000; adjusted to cost of living) to the account.
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Question 4 of 10
4. Question
Which is (are) the following statement(s) true about Coverdell IRAs?
I. Coverdell IRAs are one kind of retirement accounts.
II. Coverdell IRAs accounts are also known as Coverdell Education Savings Accounts.
III. Coverdell IRAs accounts are savings vehicles for the education of children under 18.
IV. In Coverdell IRAs, gains and withdrawals are tax-freeCorrect
Coverdell IRAs are not retirement accounts at all. Also known as Coverdell Education Savings Ac- counts, these accounts are savings vehicles for the education of children under 18. Contributions of up to $2,000 of after-tax dollars annually are permitted, and gains and withdrawals are tax-free, provided the money is used for higher education.
Incorrect
Coverdell IRAs are not retirement accounts at all. Also known as Coverdell Education Savings Ac- counts, these accounts are savings vehicles for the education of children under 18. Contributions of up to $2,000 of after-tax dollars annually are permitted, and gains and withdrawals are tax-free, provided the money is used for higher education.
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Question 5 of 10
5. Question
Which is (are) the following statement(s) true about Employee Stock Ownership Plan (ESOP)?
I. An Employee Stock Ownership Plan (ESOP) allows an employee to invest in his or her employing company’s stock.
II. This is a risky investment.
III. In Employee Stock Ownership Plan, the investment is not diversified.
IV. In Employee Stock Ownership Plan,if the company goes bankrupt, for instance, the employee does not only lose his or her job, the stock owned in the employee’s ESOP is also worthless.Correct
An Employee Stock Ownership Plan (ESOP) allows an employee to invest in his or her employing company’s stock. The company gets a tax deduction at the market value of the stock. This is a risky investment, as this investment is not diversified. If the company goes bankrupt, for instance, the employee does not only lose his or her job, the stock owned in the employee’s ESOP is also worthless.
Incorrect
An Employee Stock Ownership Plan (ESOP) allows an employee to invest in his or her employing company’s stock. The company gets a tax deduction at the market value of the stock. This is a risky investment, as this investment is not diversified. If the company goes bankrupt, for instance, the employee does not only lose his or her job, the stock owned in the employee’s ESOP is also worthless.
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Question 6 of 10
6. Question
Which is (are) the following statement(s) true about Section 529 Plans?
I. Section 529 Plans have state tax benefits.
II. Section 529 Plans allow investors to save for higher education.
III. Section 529 Plans are state-run and sometimes allow for contributions to be deductable from state taxes.
IV. Section 529 Plans are federally tax-able.Correct
Section 529 Plans have state tax benefits.
Section 529 Plans allow investors to save for higher education. Section 529 Plans are state-run and sometimes allow for contributions to be deductable from state taxes. Contributions are federally tax- able.Incorrect
Section 529 Plans have state tax benefits.
Section 529 Plans allow investors to save for higher education. Section 529 Plans are state-run and sometimes allow for contributions to be deductable from state taxes. Contributions are federally tax- able. -
Question 7 of 10
7. Question
Which of the following is (are) the job of SEC?
I. Regulate the market
II. Protect consumers
III. Impose tax
IV. Enforce several actsCorrect
The SEC’s job is to regulate the market, protect consumers, and enforce several acts.
Incorrect
The SEC’s job is to regulate the market, protect consumers, and enforce several acts.
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Question 8 of 10
8. Question
Which of the following act(s) does the SEC enforce?
I. Investment Advisers Act of 1940
II. Investment Company Act of 1940
III. The Trust Indenture Act of 1939
IV. The Securities and Exchange Act of 1934Correct
The SEC enforces:
Investment Advisers Act of 1940
Investment Company Act of 1940
The Trust Indenture Act of 1939
The Securities and Exchange Act of 1934Incorrect
The SEC enforces:
Investment Advisers Act of 1940
Investment Company Act of 1940
The Trust Indenture Act of 1939
The Securities and Exchange Act of 1934 -
Question 9 of 10
9. Question
Which act is also known as the Truth in Securities Act)?
Correct
The Securities Act of 1933 (also known as the Truth in Securities Act.
Incorrect
The Securities Act of 1933 (also known as the Truth in Securities Act.
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Question 10 of 10
10. Question
Which is (are) the following statement(s) true about FINRA?
I. FINRA is an SRO that regulates and operates NASDAQ and the Over-the-Counter (OTC) market.
II. FINRA does not only enforce its own rules, but also the SEC’s.
III. FINRA used to be known as the National Association of Securities Dealers (NASD).
IV. NASD and NYSE were combined to form FINRA.Correct
FINRA is an SRO that regulates and operates NASDAQ and the Over-the-Counter (OTC) market. FINRA does not only enforce its own rules, but also the SEC’s.
FINRA used to be known as the National Association of Securities Dealers (NASD).
NASD and NYSE were combined to form FINRA.Incorrect
FINRA is an SRO that regulates and operates NASDAQ and the Over-the-Counter (OTC) market. FINRA does not only enforce its own rules, but also the SEC’s.
FINRA used to be known as the National Association of Securities Dealers (NASD).
NASD and NYSE were combined to form FINRA.