SIE practice questionhardTrading on Margin in Retirement Accounts
Which retirement account prohibits the use of margin for purchasing securities?
- AIndividual Retirement Account (IRA)✓ Correct answer
- BCash account
- CMargin account
- DJoint tenants with rights of survivorship account
Explanation
Why A — Individual Retirement Account (IRA)
IRAs generally prohibit the use of margin for purchasing securities. Cash accounts also require full payment, but the question asks for a retirement account. Margin accounts permit borrowing when approved, and a JTWROS account may be opened with margin features if the proper agreements are in place.
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