Which of the Following Is a Strength of a Traditional

question 25

Multiple Choice

Which of the following is a strength of a traditional annuity?

• A)They can significantly reduce longevity risk.
• B)Annuities allow you to receive a fixed sum of money each year
• C)Lack of liquidity once you annuitize
• D)Both a and b
• E)Both b and c

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Definitions:

Trade or Business

Any activity carried on for the production of income from selling goods or performing services.

Necessary Expense

An expense that is considered essential for the generation of income or for maintaining a living condition, often considered for tax deductions.

Taxpayer's Business

This term generally refers to any business activity or venture that is conducted with the aim of generating income or profit taxable to the individual or entity undertaking the activity.

Cash-Basis Taxpayer

An individual or entity that reports income and deductions in the year that cash is received or paid, respectively.