C Was Recently Diagnosed with a Rare Liver Disorder and Has

question 10

Multiple Choice

C was recently diagnosed with a rare liver disorder and has been certified by his medical doctor, on June 1 of the current year, as terminally ill.C immediately resigned from his sales position with IBM and, on July 1 of the current year, sold his life insurance policy with a face value of $300,000 to a viatical "settlement provider" (VSP) for $240,000.Assuming C paid $30,000 in premiums, how much of the $240,000 proceeds must he include in his gross income for the current year?

• A)$0
• B)$300,000
• C)$210,000
• D)$240,000

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Definitions:

F(x)

Generally refers to a function of x, which might denote a variety of mathematical relationships depending on the context.

Exponential Distribution

Exponential distribution is a continuous probability distribution used to model the time between events in a Poisson process, characterizing occurrences that happen independently and at a constant average rate.

Probability Distribution

It is a mathematical tool that quantifies the probability of different outcomes in any given experiment.

Exponentially Distributed

Pertaining to a continuous probability distribution used to model the time between events in a process that occur continuously and independently at a constant average rate.