Which of the Following Describes How the Annuity Exclusion Ratio

question 118

Multiple Choice

Which of the following describes how the annuity exclusion ratio is calculated for an annuity paid over a fixed period?

• A)The expected return is divided by the number of payments.
• B)The original investment is divided by the prevailing interest rate.
• C)The original investment is divided by the number of payments.
• D)The expected return is divided by the prevailing interest rate.
• E)None of the choices are correct.

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Definitions:

Operations

The day-to-day activities required for the running of a business for the purpose of producing value for the stakeholders.

Articles of Partnership

A document that formalizes an agreement between parties to enter into a business partnership, detailing the terms and conditions of the partnership.

Annual Salary

The total amount of money that an employee earns in one year.