Identify Which of the Following Statements Is False

question 54

Multiple Choice

Identify which of the following statements is false.

• A) An individual is considered to own the stock owned by his parents, children, spouse, and grandchildren under the family attribution rules of Sec. 318.
• B) A person who has an option to purchase stock is considered to own the stock.
• C) An individual is not considered to own stock owned by a brother under the family attribution rules of Sec. 318.
• D) A stock redemption is treated as a sale or exchange only if the shareholder's ownership of one particular class of stock is terminated.

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Definitions:

Basis Points

One basis point is equal to 1/100th of 1%, used primarily to denote the change in interest rates, equity indexes, and the yield of fixed-income securities.

Price Decline

A decrease in the market price of an asset or security.

Duration

A measure of the sensitivity of the price of a bond or other fixed-income investment to a change in interest rates, often expressed in years.

Price Volatility

The rate at which the price of an asset increases or decreases for a given set of returns, indicative of the risk or stability.