In Saving for Retirement, Penny Could Take Advantage of the Unique

question 48

Multiple Choice

In saving for retirement, Penny could take advantage of the unique tax shelter offered only to small-business owners in a

• A) 401(k) plan.
• B) simple IRA plan.
• C) Roth plan.
• D) Keogh plan.

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Definitions:

Martingale Effect

A theory in probability suggesting that past events do not influence future ones, often discussed in the context of gambling or investment strategies.

Fad Effect

A temporary period of high demand for a certain product or service, often without a basis in the product's qualities or utility.

Liquidity Effect

The impact that changes in the supply of money have on interest rates, typically where an increase in money supply leads to a decrease in interest rates.

Neglected-firm Effect

The phenomenon where lesser-known or less-followed stocks generate higher abnormal returns than their well-followed counterparts.