The USProduction Activities Deduction Is Based on a Percentage of Which

question 100

Multiple Choice

The U.S.production activities deduction is based on a percentage of which of the following?

• A)taxable income before the production activities deduction
• B)50% of W-2 wages
• C)qualified production activities income
• D)both A and C above

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Definitions:

Market Risk Premium

The extra return expected by investors for taking on the risk of investing in the stock market over a risk-free rate.

Security Market Line

A line representing the relationship between the expected return of a market security and its risk, as measured by beta.

Systematic Risk

The collective risk for all investments in a market or a specific part of the market that cannot be offset through diversification.

Unsystematic Risk

The danger linked to a certain company or sector that can be reduced by spreading investments across a varied portfolio.