Study Question of the Week: August 6, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6Series 7, Series 62Series 65, Series 66, and Series 99): 

A client wants to open a custodial IRA account for his minor daughter who has earned a couple thousand dollars babysitting. Which of the following would be the best choice?

Answers:

A. Traditional IRA

B. Roth IRA

C. SIMPLE IRA

D. SEP IRA

Correct Answer: B. Roth IRA

Rationale: SEP and Simple IRAs are for small businesses. A traditional IRA would work but since the client’s daughter doesn’t have enough income to take advantage of the tax deduction benefit from a traditional IRA, the Roth IRA is the best choice since it will permit her to eventually withdraw tax-free.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Leave a Reply

Your email address will not be published. Required fields are marked *