National Evaluation Series (NES) Business Studies Practice Test

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Prepare for the NES Business Studies Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Boost your exam readiness now!

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Which retirement account allows greater control over investment choices?

Traditional IRA
Roth IRA
401k plan
Social security benefits

The correct answer is: 401k plan

The 401k plan allows greater control over investment choices compared to the other options listed. In a 401k plan, participants typically choose from a selection of investment options provided by the plan, such as mutual funds, stocks, and bonds. This flexibility enables individuals to tailor their investment strategies based on their risk tolerance and financial goals. In contrast, retirement accounts like Traditional IRAs and Roth IRAs also provide a degree of investment choice, but they usually do not offer the same level of diversity and management tools available through a 401k. These individual retirement accounts allow for a wide range of investments but might have more restrictions on the frequency of trading and may involve higher individual management responsibilities. Social Security benefits are fundamentally different, as they do not involve an investment account where choices can be made; instead, they are a government program providing income based on an individual's earnings history and are not directly influenced by personal investment decisions. This distinction highlights the unique position of a 401k plan in providing participants more control over their investments compared to the other options.