All Courses > Portfolios > 200
Portfolios 210: How to Invest for College

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
How much can you contribute to a Section 529 plan?
Choose wisely. There is only one correct answer.
The amount varies according to the plan. Each plan is different. Some have very high limits.
2.
Which of the following will a financial aid office consider most important?
Choose wisely. There is only one correct answer.
Your income. Financial aid offices consider this the most important of all these options.
3.
What kinds of investments can you transfer to an UGMA account?
Choose wisely. There is only one correct answer.
All of the above. You are allowed to transfer any of these to an UGMA account.
4.
When using a traditional IRA to pay for qualified educational expenses, how much is the early withdrawal penalty?
Choose wisely. There is only one correct answer.
There is none. As long as the withdrawal is for qualified educational expenses, there will not be an early withdrawal penalty. However, you may still have to pay taxes on them.
5.
Assuming they are used for qualified educational purposes, withdrawals from a Coverdell education savings account are _______.
Choose wisely. There is only one correct answer.
Tax-free. Contributions are taxable, but qualified withdrawals are tax-free.
6.
If you'll be sending your child to college in five years, her college portfolio should _______.
Choose wisely. There is only one correct answer.
Resemble an intermediate-term portfolio. A college portfolio should become tamer as the student gets closer to matriculating. The idea is to protect the gains instead of angling for more.
7.
Prepaid tuition plans let you lock in the cost of college at _______.
Choose wisely. There is only one correct answer.
Today's prices. One of the chief attractions of prepaid tuition plans is how they lock in college costs at current prices.
8.
If you withdraw money from your Roth IRA for college expenses, you might still have to pay taxes on them.
Choose wisely. There is only one correct answer.
True. Any earnings that have built up in your account will be taxed. The original contributions in the account will not be taxed, as they were already taxed in the year you put them in.