Passive Loss Is the Total Amount of Losses from a Passive

question 6

True/False

Passive loss is the total amount of losses from a passive activity minus the total income from the passive activity.

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Definitions:

Break-Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset or project.

Operating Cash Flow

The amount of cash generated by a company’s normal business operations, indicating whether a company is able to generate sufficient positive cash flow.

Top-Down Approach

An investment strategy that begins with analyzing macroeconomic factors, then drilling down to the industries and finally individual companies to make investment decisions.