Identify Which of the Following Statements Is False

question 58

Multiple Choice

Identify which of the following statements is false.

• A)The acquiescence policy was adopted by the U.S. Tax Court to permit litigating parties to agree on the exact amount of the tax due.
• B)Letter rulings are binding only with respect to the taxpayer requesting the ruling.
• C)The small cases procedure of the U.S. Tax Court allows a less formal hearing but provides for no appeal.
• D)The IRS may retroactively revoke an acquiescence.

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Definitions:

Risk Premium

The extra return demanded by investors for taking on additional risk above the risk-free rate of return.

Asset Return

The income that an asset produces for its investor, measured as a percentage of the asset's purchase price.

Risk-free Rate

A theoretical return on an investment with zero risk, typically represented by treasury bills or government bonds.

Risk Premium

The extra return above the risk-free rate that investors demand to compensate for the additional risk of holding a risky asset.