When an Investor Purchases Units in a Unit Trust,this Is

question 75

Multiple Choice

When an investor purchases units in a unit trust,this is known as ________ investing.

• A) absolute
• B) direct
• C) indirect
• D) value

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Definitions:

Incremental Net Income

Net income resulting from a particular action or decision, calculated as the difference in total net income if the action is taken versus if it is not.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

After-Tax Discount Rate

The discount rate used in capital budgeting that accounts for the effects of income tax.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of a firm's shareholders' wealth maximization.