Which of the Following Is a True Statement

question 75

Multiple Choice

Which of the following is a true statement?

• A) Employees cannot claim business expense deductions.
• B) Employees can claim business expense deductions for AGI.
• C) Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.
• D) Employees can claim business expense deductions as miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
• E) None of the choices are true.

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Definitions:

Clientele Effect

A theory suggesting that the stock price movements are influenced by the preferences of a company's current shareholder base.

Payout Ratios

The proportion of earnings paid out to shareholders in dividends, indicating how much profit is distributed versus retained.

Investors

Persons or organizations that invest funds anticipating financial profits in return.

Expectations Theory

With respect to dividends: a dividend that’s lower than expected will be taken as a negative by investors even if it is larger than previous dividends. A variation on the signaling effect of dividends. With respect to interest rates: A theory explaining the shape of the yield curve. The curve slopes up or down depending on whether expectations about future interest and inflation rates are increasing or decreasing.