SIE practice questionmediumAccount Types
A 16-year-old wants to open an investment account to buy stocks. Which account type is most appropriate?
- AUniform Gifts to Minors Act (UGMA) account✓ Correct answer
- BIRA account
- CMargin account
- DIndividual cash account
Explanation
Why A — Uniform Gifts to Minors Act (UGMA) account
Minors cannot legally own accounts in their own name. An UGMA account is a custodial account for minors. IRAs and individual accounts typically require the account holder to be of legal age, as do margin accounts.
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