Which of the Following Statements Is True

question 9

Multiple Choice

Which of the following statements is true?

• A) If the donor retains the power to change the trust beneficiary, the gift is complete.
• B) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor.
• C) Transfers to a revocable trust are completed gifts.
• D) All of the above are false.

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Definitions:

Return on Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management uses equity investments.

Total Capitalization

The total value of a company’s outstanding equity and debt.

Note Payable

A liability in a formal written promise to pay a specific amount of money at a future date or dates.

Common Stock

Represents an equity ownership in a corporation, giving holders voting rights and a share of the company's profits via dividends.