Which of the Following Statements Concerning Traditional IRAs and Roth

question 82

Multiple Choice

Which of the following statements concerning traditional IRAs and Roth IRAs is true?

• A) A taxpayer may contribute to a Roth IRA at any age but a taxpayer is not allowed to contribute to a traditional IRA after reaching 70½ years of age.
• B) The annual contribution limits for a traditional IRA and Roth IRA are the same.
• C) Taxpayers with high income are allowed to contribute to traditional IRAs but not to Roth IRAs.
• D) All of these are true statements.

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Definitions:

Net Operating Income

The profit a company generates from its operations, before taxes and interest, calculated as gross income minus operating expenses.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Operating Assets

Assets that are used for the day-to-day operations of a business, including cash, inventory, and property, plant, and equipment.

Minimum Required Rate

The lowest acceptable rate of return on an investment demanded by an investor, considering risk factors.