Question

In: Finance

Which of the following investments would be the least suitable for a qualified retirement plan? Question...

Which of the following investments would be the least suitable for a qualified retirement plan?

Question 18 options:

Guaranteed investment contract (GIC)

Real estate investment trust (REIT)

Equity mutual fund

Municipal bond fund

Solutions

Expert Solution

Answer: D. municipal bonds

Municiapal bonds are least suitable for a qualified reitrement plan as these offer lower yields with any other options. They are included in reirement portfolio for tax benefit ( people with higher tax bracket will benefit) they can compared with corporate bond yields as these offer 7-8%

Guaranteed investment certificate (GIC) issued by banks or trust companies. GICs give your clients two very important benefits in volatile markets: guaranteed interest and principal protection.

Typically, REITs offer investors an opportunity to possess high-priced real estate and enable them to earn dividend income to boost their capital eventually. This way, investors can utilise the opportunity to appreciate their capital and generate income at the same time.

Typically, equity funds are known to generate better returns than term deposits or debt-based funds. There is an amount of risk associated with these funds since their performance depends on various market conditions.In along run such retirement plan equity mutual funds will play key role for generating income .


Related Solutions

When referring to retirement plans the term "qualified" means that the plan                              
When referring to retirement plans the term "qualified" means that the plan                                      ____ Is provided by an employer that is granted a "good employer" award by the Department of Health & Human Services. Satisfies the requirements of one or more provision(s) of the Internal Revenue Code. Provides benefits only for highly compensated employees. Provides benefits only for employees who are not highly compensated. Under the law governing qualified pension plans, which of the following are the most restrictive age     ____ and service...
James received a distribution of assets from a qualified retirement plan on June 8, 2016. The...
James received a distribution of assets from a qualified retirement plan on June 8, 2016. The gross distribution totaled $58,550. James deposited the funds into a money market account. On July 22, 2016, James made a $58,550 contribution to a traditional IRA. This transaction is a/an ______. Direct rollover. Indirect rollover. Trustee-to-trustee transfer. Tax-free distribution.
Your company offers a retirement plan administered by Forever Investments. The plan allows you to invest...
Your company offers a retirement plan administered by Forever Investments. The plan allows you to invest in a variety of mutual funds, including Forever’s Growth fund (FG for short), Forever’s Value fund (FV), and Forever SnP 500 Index Fund (FSI). FSI is an ‘index’ fund that simply tries to match the performance of the S&P 500 index. Suppose you have data about each fund’s monthly returns during the last 20 years. Explain briefly (max a paragraph, with 3 sentences) how...
. Chan, a single 35-year-old CPA, is covered by a qualified retirement plan at work. His...
. Chan, a single 35-year-old CPA, is covered by a qualified retirement plan at work. His salary is $120,000, and his total AGI is $129,000. The maximum contribution he can make to a Roth IRA in 2020. please show work and lable.
Which of the following statements best describes the advantages of a qualified money-purchase pension plan? (A)...
Which of the following statements best describes the advantages of a qualified money-purchase pension plan? (A) It is designed to adequately protect against inflation. (B) Older employees can be more readily provided with adequate retirement benefits. (C) Tax sheltering is enhanced because an annuity can be purchased for each employee. (D) Costs are predictable, and the design is simple and understandable.
All but which of the following tests must be met in order for a retirement plan...
All but which of the following tests must be met in order for a retirement plan to receive favorable tax treatment as a qualified plan? a. Percentage test b. Ratio test c. Participation test d. Average benefit test 14. An accounting firm has 125 employees. All employees are covered by the firm’s defined benefit plan except for 70 junior associates. Has the minimum participation requirement been met for the plan? a. Yes, both parts of the 50/40 test have been...
Which of the following variables yields data that would be suitable for use in a histogram?...
Which of the following variables yields data that would be suitable for use in a histogram? __________ the time concentrating on a math problem color of hair brand of TV gender of a student
Which of the following insurance premiums would not be considered a qualified medical expense? a. Premiums...
Which of the following insurance premiums would not be considered a qualified medical expense? a. Premiums for health care continuation coverage (such as coverage under COBRA) b. Premiums for Medicare supplemental policy, such as Medigap c. All premiums for long-term care insurance including amounts over the aged-based limits d. Premiums for Medicare and other health care coverfage if the taxpayer was 65 or older
Explain why an ETF fund would be suitable for long term investments and why woukd an...
Explain why an ETF fund would be suitable for long term investments and why woukd an ETF fund not be suitable for ling term investing. Include examples
Would the glucose test be suitable for analyzing the following samples? Which of the three unknown...
Would the glucose test be suitable for analyzing the following samples? Which of the three unknown enzyme treatments would give positive results? Explain your answers. the amount of glucose present in a fruit the amount of carbohydrates in a beverage sweetened with high fructose corn syrup the number of monosaccharides present in a bacterial sample
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT