Constance, Who Is Single, Lives in an Area That Suffered

question 926

Multiple Choice

Constance, who is single, lives in an area that suffered a major hurricane which was declared a federal disaster. Her car sustained $6,200 in damages. Constance does not expect to recover any of the loss from her insurance company. Constance's 2018 AGI is $31,000. Her casualty loss is $3,000; she has other itemized deductions of $5,200. In 2019, Constance's insurance company reimburses her $2,800. Constance's 2019 AGI is $28,000. As a result, Constance must

• A) do nothing and simply keep the $2,800.
• B) do nothing to the 2018 return but report $2,800 of income on her 2019 return.
• C) amend the 2018 return to show $0 loss and file her 2019 return to show $200 loss.
• D) amend the 2018 return to show the $200 loss.

Gain proficiency in computing payments necessary to amortize a given debt within a defined period under specified interest rates.

Understand how to evaluate the economic value of payment streams to assist in financial decision-making.

Learn to compare the cost-effectiveness of different cash or credit purchase options.

Grasp the methodology for calculating combined equivalent values of multiple cash flows today or at a future date, given a specific interest rate.

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Definitions:

Coupon Rate

The yearly interest rate that a bond yields, represented as a percentage of its nominal value.

Face Value

The nominal or dollar value printed on a bond or stock certificate, representing the amount due at maturity or the value of a share.

Annual Interest

The amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed.

Montreal Bond Market

A marketplace for the trading of bonds issued within or by entities located in Montreal, Canada, or related to its economy.