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# Investment capital in a 401(k) or Roth IRA, both long-term investments

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Senior Manager
Joined: 27 Aug 2014
Posts: 311
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GPA: 3.9
WE: Analyst (Energy and Utilities)
Investment capital in a 401(k) or Roth IRA, both long-term investments  [#permalink]

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Updated on: 02 Aug 2019, 12:01
00:00

Difficulty:

25% (medium)

Question Stats:

71% (01:07) correct 29% (00:59) wrong based on 86 sessions

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Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity due to early withdrawal penalties, withdrawal taxes, and the time it takes to consolidate and sell the individual investments within these funds.
(A) Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity
(B) Investment capital in a 401(k) or Roth IRA, both long-term investments, has low liquidity
(C) Investment capital in a 401(k) or Roth IRA, both long-term investments, had low liquidity
(D) Investment capital in a 401(k) or Roth IRA, both long-term investments, are low liquidity
(E) Investment capital in a 401(k) or Roth IRA, both long-term investments, is low liquidity

Source: Dominate GMAT

Originally posted by santorasantu on 01 Aug 2019, 15:33.
Last edited by santorasantu on 02 Aug 2019, 12:01, edited 1 time in total.
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Re: Investment capital in a 401(k) or Roth IRA, both long-term investments  [#permalink]

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02 Aug 2019, 11:43
santorasantu wrote:
Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity due to early withdrawal penalties, withdrawal taxes, and the time it takes to consolidate and sell the individual investments within these funds.
(A) Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity
(B) Investment capital in a 401(k) or Roth IRA, both long-term investments, has low liquidity
(C) Investment capital in a 401(k) or Roth IRA, both long-term investments, had low liquidity
(D) Investment capital in a 401(k) or Roth IRA, both long-term investments, are low liquidity
(E) Investment capital in a 401(k) or Roth IRA, both long-term investments, is low liquidity

Source: Dominate GMAT

santorasantu underlined part is missing, even if it is clear from (A) better to have it
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Senior Manager
Joined: 27 Aug 2014
Posts: 311
Location: Netherlands
Concentration: Finance, Strategy
Schools: LBS '22, ISB '21
GPA: 3.9
WE: Analyst (Energy and Utilities)
Re: Investment capital in a 401(k) or Roth IRA, both long-term investments  [#permalink]

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02 Aug 2019, 12:01
1
Thanks, edited the question accordingly

GKomoku wrote:
santorasantu wrote:
Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity due to early withdrawal penalties, withdrawal taxes, and the time it takes to consolidate and sell the individual investments within these funds.
(A) Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity
(B) Investment capital in a 401(k) or Roth IRA, both long-term investments, has low liquidity
(C) Investment capital in a 401(k) or Roth IRA, both long-term investments, had low liquidity
(D) Investment capital in a 401(k) or Roth IRA, both long-term investments, are low liquidity
(E) Investment capital in a 401(k) or Roth IRA, both long-term investments, is low liquidity

Source: Dominate GMAT

santorasantu underlined part is missing, even if it is clear from (A) better to have it
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Joined: 23 Jun 2018
Posts: 5
Investment capital in a 401(k) or Roth IRA, both long-term investments  [#permalink]

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13 Aug 2019, 04:01
The subject, Investment Capital is singular, so we can reject both A and D.

C) Investment capital in a 401(k) or Roth IRA, both long-term investments, had low liquidity - "had" - past tense, but non-underlined sentence is in present tense. So we can reject it because of tense error.

(E) Investment capital in a 401(k) or Roth IRA, both long-term investments, is low liquidity - Investment Capital .. is low Liquidity doesn't make sense.
"is" is a part of the verb "to be". Example - He is young.

(B) Investment capital in a 401(k) or Roth IRA, both long-term investments, has low liquidity - Correct

Please let me know if there is any fault in my understanding.
Thank you
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Re: Investment capital in a 401(k) or Roth IRA, both long-term investments  [#permalink]

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13 Aug 2019, 10:25
santorasantu wrote:
Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity due to early withdrawal penalties, withdrawal taxes, and the time it takes to consolidate and sell the individual investments within these funds.
(A) Investment capital in a 401(k) or Roth IRA, both long-term investments, have low liquidity
(B) Investment capital in a 401(k) or Roth IRA, both long-term investments, has low liquidity
(C) Investment capital in a 401(k) or Roth IRA, both long-term investments, had low liquidity
(D) Investment capital in a 401(k) or Roth IRA, both long-term investments, are low liquidity
(E) Investment capital in a 401(k) or Roth IRA, both long-term investments, is low liquidity

Source: Dominate GMAT

Answer choice (B) is correct as it uses the singular verb "has" to refer to singular noun "investment capital" and correctly uses the verb "to have."

Answer choice (A) is incorrect as it uses the plural verb "have" to refer to singular noun "investment capital."
Answer choice (C) is incorrect as it uses the past tense verb "had" without any indication that the description of the investments is limited to the past.
Answer choices (D) and (E) are incorrect as they use the verb "to be" to describe how investment capital possesses low liquidity.
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Re: Investment capital in a 401(k) or Roth IRA, both long-term investments   [#permalink] 13 Aug 2019, 10:25
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