Present Value Is Best Defined as The

question 119

Multiple Choice

Present value is best defined as the:

• A) worth or value today of future expected returns or costs.
• B) worth in the future of a current flow of returns or costs.
• C) current worth of a financial asset purchased in the past.
• D) expected future value of a financial asset purchased today.

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Definitions:

Replacement Period

The timeframe during which property must be replaced to defer recognition of gains for tax purposes under certain conditions.

Tax Due

The amount of tax liability one owes to a tax authority after all calculations are completed.

Wash Sale Rules

IRS regulations that disallow the claim of a loss on the sale of a security if a substantially identical security is purchased within a 30-day period before or after the sale.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.