Which One of These Would Generally Be Considered the Most

question 48

Multiple Choice

Which one of these would generally be considered the most rational action for a tax-paying investor?

• A)Trading frequently
• B)Selling their losing and holding their winning securities
• C)Throwing darts to select their portfolio holdings
• D)Holding a less than fully diversified portfolio of securities
• E)Ignoring taxes when making investment decisions

---

Definitions:

Constructive Trust

A constructive trust is an equitable remedy imposed by a court to address wrongful conduct, such as fraud or unjust enrichment, creating a fiduciary relationship over the property for the benefit of the wronged party.

Entitled

Having a legal right or a just claim to receive or do something.

Trustee

An individual or firm that holds or administers property or assets for the benefit of a third party.

Beneficiary

An individual or entity entitled to benefits or advantages from something, such as a trust, insurance policy, or a will.