3
QuizMultiple Choice

Investing — Test

Question 3 • Personal Finance

Why do tax-deferred accounts support growth?

Answer
A
They increase fees
B
They allow more money to grow before taxes
C
They remove risk
D
They eliminate losses

Explanation

Tax-deferred accounts postpone taxes on investment earnings, so more of the money remains invested and can earn returns over time. They do not eliminate losses or investment risk, and they do not necessarily increase fees. The correct choice is “They allow more money to grow before taxes.”

AI-written and checked against the verified answer.

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