Which of the Following Statements About 401(k)plans Are True

question 51

Multiple Choice

Which of the following statements about 401(k) plans are true?
I. They are defined benefit plans.
II. They allow employer and employee contributions.
III. Earnings accrue tax-free during the employee's working years.
IV. They allow employee discretion in asset allocation.
V. They always have minimum guaranteed rates of return.

• A)I,IV,and V only
• B)I,II,and V only
• C)II and III only
• D)II,III,and IV only
• E)All of these choices are correct.

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Definitions:

Paul Revere

An American silversmith, engraver, early industrialist, and a Patriot in the American Revolution, best known for his midnight ride to alert the colonial militia of the approaching British forces.

Boston Massacre

A confrontation on March 5, 1770, in which British soldiers killed five civilian men in Boston, escalating tensions that led to the American Revolutionary War.

British Soldiers

Members of the United Kingdom's military service historically involved in various global conflicts and peacekeeping missions.

Thomas Jefferson

The third President of the United States (1801-1809), principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of republicanism in the United States.