Exercise

Match each term to its description.

A. CESA

B. 529 college savings plan

C. Prepaid tuition plan

D. UGMA/UTMA

E. Educational savings bond

1. _____ This instrument allows earnings to grow tax-free and can be used to pay for all educational expenses for primary through graduate school education.

2. _____ Setting up this type of instrument allows the investor to avoid inflation risk by purchasing credits to pay for education expenses in today’s dollars.

3. _____ These instruments allow an adult to set up an account for the benefit of a minor, and although the account is not managed by