This Year,Garfield Inc

question 3

Multiple Choice

This year,Garfield Inc.generated a $25,000 net operating loss.Which of the following statements is false?

• A)If Garfield can carry the entire NOL back to deduct against prior year taxable income,the NOL will have no deferred tax consequences.
• B)If Garfield can't use any of the NOL as a carryback deduction,the NOL will result in a deferred tax liability.
• C)Garfield can elect to give up the carryback of the NOL.
• D)If Garfield can't use any of the NOL as a carryback deduction,it can carry the NOL forward for 20 years.

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Definitions:

Single-Index Model

A model that represents the returns of a portfolio or asset as linearly dependent on the returns of a single market index, simplifying the evaluation of portfolio risk.

Markowitz Model

A portfolio optimization theory that demonstrates how to achieve the best portfolio allocation to maximize return for a given level of risk through diversification.

Systematic Risk

The risk inherent to the entire market or entire market segment, which cannot be eliminated through diversification.