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

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 .

jeff jeffy answered 1 year ago

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