Frank Established a Roth IRA at Age 25 and Contributed

question 11

Multiple Choice

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?

• A) $0
• B) $131,244
• C) $244,756
• D) $376,000
• E) None of the above

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Definitions:

Intrinsic Value

The actual, inherent value of a financial asset, determined through fundamental analysis without considering its market price.

Per Share FCFE

Free Cash Flow to Equity (FCFE) calculated on a per-share basis, indicating the amount of cash available to shareholders per share.

Required Return

The minimum expected return by investors for investing in a risky asset, considering the risk level compared to the risk-free rate.

Per Share FCFE

Free Cash Flow to Equity per share, which indicates how much cash is available to the equity shareholders of a company after all expenses and reinvestments.