Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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What does the acronym IRA stand for?

Individual Retirement Account
Invested Retirement Asset
Income Retirement Account
Internal Revenue Account

The correct answer is: Individual Retirement Account

The acronym IRA stands for Individual Retirement Account. This term refers to a type of savings account in the United States that is designed to help individuals save for retirement while obtaining tax advantages. Contributions to an IRA may be tax-deductible depending on the individual's circumstances, and earnings on the investments within the account grow tax-deferred until withdrawal. This option is the only one that accurately reflects the formal definition and legal classification of the account as recognized by tax laws. The other choices do not align with the established terminology or regulatory framework surrounding retirement savings accounts.