Which of the Following Do Stocks and Bonds Have in Common

question 120

Multiple Choice

Which of the following do stocks and bonds have in common?

• A) Both are means for the issuing firm to raise money for operations.
• B) Both come with part ownership in the issuing firm.
• C) Both have a fixed rate of return.
• D) Both impose a debt obligation on the issuing firm.
• E) Both have a fixed maturity date.

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Definitions:

Appreciated Capital Gain Property

Property that has increased in value over time, where the capital gain realized from its sale is taxed at a possibly reduced rate depending on the duration of ownership.

Tax-Exempt Status

A designation that allows an organization or entity to be exempt from federal income tax under certain sections of the Internal Revenue Code.

Charitable Contribution

Donations or gifts to charitable organizations, which can be deductible from an individual's taxes.

Itemize

This refers to the process of individually listing tax deductions on one's tax return, rather than taking the standard deduction.