Which of the Following Is False About a 401(k) Plan

question 50

Multiple Choice

Which of the following is false about a 401(k) plan?

• A) Withdrawals before age 59 1/2 result in a 10% tax penalty.
• B) Less than 50% of all employers offering these plans match a portion of employee's contributions.
• C) Your contributions are limited to a set dollar amount each year.
• D) The money you contribute is deducted from your pay before income taxes are assessed.

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Definitions:

Risk-Averse

A description of an investor or investment strategy that prioritizes the minimization of risk over potential gains.

Expected Return

The average return of an investment, accounting for the likelihood of different outcomes, weighted by their probabilities.

Expected Return

The anticipated value or profit that an investment is expected to generate, accounting for all known risks and rewards.

Standard Deviation

Standard deviation is a statistical measure of the dispersion or variability of returns for a given security or market index, indicating the degree of risk involved.