A Charitable Remainder Trust

question 34

Multiple Choice

A charitable remainder trust

• A)splits assets between a surviving spouse and a trust
• B)distributes income on a trust to a charitable organization for a period of time, after which, the principal assets are transferred to a beneficiary
• C)is the same as a Q-TIP trust
• D)distributes income from trust assets to individual beneficiaries for a period of time, after which, the principal assets are transferred to a remainderman, which must be a charitable organization

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Definitions:

Risk-free Interest Rate

The yield from an investment that carries no risk of losing money, often linked to government securities.

Exercise Price

The predetermined price at which the option holder can buy (call option) or sell (put option) the underlying security.

Incentive Bonuses

Additional compensation given to employees as a form of encouragement to exceed performance goals.

Stipulated Benchmark

A predefined standard against which the performance of an investment or fund is measured.