Which of the Following Statements Concerning Individual 401(k)s Is False

question 48

Multiple Choice

Which of the following statements concerning individual 401(k) s is false?

• A) Individual 401(k)s have contribution limitations.
• B) Individual 401(k)s are available only to self-employed taxpayers with 100 or fewer employees.
• C) Employees of the taxpayer cannot participate in individual 401(k)s.
• D) In general, individual 401(k)s have higher administrative costs than SEP IRAs.

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Definitions:

Preferred Shareholders

Investors who own preferred shares in a company, which typically come with a fixed dividend but no voting rights.

Bondholders

Individuals or institutions that hold debt securities issued by corporations or governments, thereby lending them money.

Income Tax

A tax that governments impose on financial income generated by all entities within their jurisdiction.

Preferred Stock

A category of corporate ownership that holds a superior right over the company's assets and profits compared to common stock.