Choose the Word or Phrase in [ ] Which Will

question 4

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Speculating | Investing] is considered to be a long-term activity.

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Definitions:

Tax-Deferred Plans

Investment accounts, such as IRAs or 401(k)s, where contributions may reduce taxable income in the year made, with taxes paid later upon withdrawal.

Accumulation Period

The phase in some investment vehicles, such as annuities, during which an investor builds up their investment value through payments or investment returns.

Distribution Period

The timeframe over which payments are made from a retirement or investment account to the account holder.

Traditional IRA

An individual retirement account offering tax advantages, where contributions may be tax-deductible and investment growth is tax-deferred until withdrawal.