Zeke Made the Following Donations to Qualified Charitable Organizations During

question 133

Multiple Choice

Zeke made the following donations to qualified charitable organizations during the year: $$\begin{array} { l r r r } & \text { Basis } & \underline { \text { Fair Market } } \\&& \underline { \text { Value } }\\\begin{array} { l } \text { Used clothing (all acquired more than a year ago) of } \\\text { taxpayer and his family }\end{array} & \$ 1,350 & \$ 375 \\\begin{array} { l } \text { Stock in ABC, Inc., held as an investment for fifteen } \\\text { months }\end{array} & 12,000 & 10,875 \\\begin{array} { l } \text { Stock in MNO, Inc., held as an investment for eleven } \\\text { months }\end{array} & 15,000 & 18,000 \\\text { Real estate held as an investment for two years } & 15,000 & 30,000\end{array}$$ ? The used clothing was donated to the Salvation Army; the other items of property were donated to Eastern State University.Both are qualified charitable organizations.Disregarding percentage limitations, Zeke's charitable contribution deduction for the year is:

• A)$43,350.
• B)$56,250.
• C)$59,250.
• D)$60,375.
• E)None of the above.

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Definitions:

Diversified Risk

Diversified risk refers to the reduction of risk in an investment portfolio by allocating investments among various financial instruments, industries, or other categories.

Systematic Risk

This is the exposure to uncertainty faced by all investments in a market or a sector, and is also recognized as market risk or non-diversifiable risk.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the market as a whole.

Market Risk Premium

The extra return expected by investors for taking on the risk of investing in the stock market over a risk-free rate.