Ray Is Starting a New Business with a Friend and Trying

question 9

Multiple Choice

Ray is starting a new business with a friend and trying to decide between a C corporation,S corporation,and partnership.Which of the following statements regarding his decision is correct?

• A)An S corporation owner must pay income taxes only on the salary received.
• B)A partner in a partnership is taxed on his or her share of partnership income.
• C)A shareholder in a C corporation is taxed on his or her share of corporate income.
• D)S corporations pay taxes on their current year income.

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Definitions:

Market Risk

The likelihood that investors might face losses because of issues impacting the general functioning of the financial markets.

Standard Deviation

A statistical measure of the dispersion or spread of a set of data points in relation to their mean, used to gauge volatility.

Correlated

Refers to the relationship between two variables where a change in one can be associated with a change in the other.

Market

A place or system where buyers and sellers interact to trade goods, services, or securities.