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Portfolios 204: Primer to Individual Retirement Accounts

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1.
What is the name for the party that holds funds you contribute to your IRA?
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Custodian. When holding funds, the party is referred to as a custodian.
2.
You can generally have both a Roth and a traditional IRA.
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True. However, you will be penalized if you exceed the yearly contribution limit.
3.
Which of the following is not allowed to fund an IRA?
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Cash value life insurance. Neither this nor collectibles are allowed as IRA investments.
4.
Capital gains on Roth IRAs are _________.
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Tax-free. As long as you meet the age and waiting-time requirements, dividends and capital gains are tax-free.
5.
Which of the following may fund a Roth IRA?
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A bond that does not pay periodic interest. This is called a zero coupon bond, and it is allowed as an IRA investment. The others are not.