In Its Basic Form, an IRA Simply Does What to Taxes

question 124

Multiple Choice

In its basic form, an IRA simply does what to taxes?

• A) eliminates them
• B) passes the taxes on to the rich
• C) defers their payment to a later time
• D) reduces the tax payments when you save

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Definitions:

Yield to Maturity

The complete yield expected from a bond assuming it is retained until it matures.

Yield to Call

The rate of return anticipated on a bond if it is held until the call date, which is before the bond's maturity, including all interest payments and the call price.

Yield to Maturity

The total return anticipated on a bond if it is held until the date of maturity, accounting for interest payments and capital gains.

Call Premium

The amount by which the price of a call option exceeds its intrinsic value, reflecting the cost to buy the option.