At 10:00AM

question 37

Multiple Choice

At 10:00A.m., Homer called his broker and placed an order to purchase a security that represented a claim on the S&P 500. At 2:00 p.m., Homer sold the security and realized a $600 gain. Homer paid his broker a $10 commission on each transaction. The security Homer purchased was:

• A)an S&P 500 index fund that had a load.
• B) a no-load S&P 500 index fund.
• C) a SPDR (spider).
• D) a Diamond.

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Definitions:

Shareholders

Shareholders are individuals or entities that own one or more shares of stock in a corporation, giving them ownership interests in the company.

Resident Aliens

Individuals who are not citizens of the United States but meet certain residency or physical presence tests and are subject to U.S. taxes on global income.

Electing

The act of choosing a specific tax treatment or option as permitted under tax laws.

Parent-subsidiary Corporations

A relationship between two companies where one (the parent) controls the other (the subsidiary).