Which of the Following Statements Regarding a Roth IRA Is

question 56

Multiple Choice

Which of the following statements regarding a Roth IRA is false?

• A) Contributions to a Roth IRA are nondeductible.
• B) A Roth IRA is tax exempt.
• C) Individuals of any age can make qualified tax-exempt withdrawals from a Roth IRA.
• D) High-income individuals are not allowed to contribute directly to a Roth IRA.

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Definitions:

Distribution Efficiencies

The effectiveness with which a company is able to deliver its products or services to its customers in the most cost-effective manner.

Tax Shields

Reductions in income tax liability achieved through allowable deductions such as mortgage interest, depreciation, or charitable donations.

Bondholders

Investors who own bonds issued by a corporation or government, essentially lending money to the issuer in exchange for periodic interest payments and the return of principal at maturity.

Bankruptcy Probabilities

Bankruptcy Probabilities represent the likelihood of a company or entity being unable to meet its financial obligations and thus having to declare bankruptcy.