Which of the Following Is True About Mutual Funds and Taxes

question 26

Multiple Choice

Which of the following is true about mutual funds and taxes?

• A) Capital gain distributions are taxed when you sell your shares.
• B) Income dividends are taxed quarterly.
• C) Investment companies are required to send each shareholder a year-end statement that specifies how much each received in dividends and capital gain distributions.
• D) Capital gains distributions are not taxed.
• E) Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account.

---

Definitions:

Psychodynamic Perspective

A psychological approach that emphasizes the systematic study of the psychological forces underlying human behavior, feelings, and emotions and how they might relate to early experience.

Psychoanalysis

A technique of treating psychological disorders and gaining insight into the subconscious mind, developed by Freud, that involves free association, dream interpretation, and analysis of resistance and transference.

Free Association

A psychoanalytic technique where patients are encouraged to verbalize thoughts as they come, without censorship, to uncover unconscious desires or issues.

Verbalize

To verbalize means to express thoughts or feelings in words, making abstract concepts communicable and understandable.