Sylvia Owns 100 Shares of Maxima Growth Mutual Fund

question 158

Multiple Choice

Sylvia owns 100 shares of Maxima Growth mutual fund.In December she received a check for $50,payment of ordinary income dividend distributions and capital gains distributions.Sylvia also noticed in her daily newspaper listings that Maxima Growth is now worth $2 per share more than what she purchased it for at the beginning of the year.How much will Sylvia's holdings in Maxima Growth add to her taxable income for the year assuming she decides not to sell the fund this year?

• A)$0
• B)$50
• C)$52
• D)$250

---

Definitions:

Average Accounting Rate of Return

A method to estimate the profitability of investments, calculated by dividing the average annual profit by the initial investment cost.

Straight-Line Depreciation

A scheme for dividing the expenditure of a solid asset over its life span in equal yearly quotas.

Asset

Anything of value owned by an individual or a corporation that can be used to produce positive economic value.

IRR

Internal Rate of Return, a metric used to estimate the profitability of potential investments.