Which of the Following Persons Can Establish a Traditional IRA

question 16

Multiple Choice

Which of the following persons can establish a traditional IRA?
I.A person whose only income received is from investments.
II.A 75 year-old man who has earned taxable income.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Present Value Factors

Factors used to calculate the present value of a future amount of money or stream of cash flows, considering the time value of money.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, reflecting the risk associated with the investment.

Net Cash Flows

The difference between a company's cash inflows and outflows in a given period, indicative of its financial health.

Capital Budgeting

The process of evaluating and selecting long-term investments consistent with the firm's goal of wealth maximization.