Which of the Following Is a True Statement About the First

question 97

Multiple Choice

Which of the following is a true statement about the first payment received from a purchased annuity?

• A) The payment can only be taxed in the year after the annuity was purchased.
• B) The payment is not taxed until the annuity payments cease altogether.
• C) A portion of the payment is a return of capital.
• D) The payment is included in gross income.
• E) None of the choices are a true statement.

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Definitions:

Losing Positions

Investments that have decreased in value from the original purchase price, leading to potential financial losses for the investor.

Active Investments

Investment strategies that involve frequent transactions and monitoring by investors or fund managers with the aim to outperform market indexes.

Forecasting Errors

Discrepancies between predicted values and actual values that occur when projecting future data points or trends.

Passive Investments

Investment strategies that involve minimal buying and selling actions, typically focused on long-term appreciation and mimicking market or sector indexes.