"Tiny Dancer" Is the Name of a Bronze Figurine Created

question 6

Multiple Choice

"Tiny Dancer" is the name of a bronze figurine created by artist Diego Ossa.The owner recently recognized a $43,500 gain on sale of the figurine.Which of the following statements is false?

• A)If Diego Ossa was the seller,the gain is ordinary.
• B)If a commercial art gallery that had held Tiny Dancer in its inventory was the seller,the gain is ordinary.
• C)If a private collector who purchased Tiny Dancer from an art gallery was the seller,the gain is capital gain.
• D)None of the above is false.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in the fair value of an asset or liability, or an unrecognized firm commitment, that is attributable to a particular risk.

Thailand Bahts

The currency of Thailand, used as the standard monetary unit in the country.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.

Fair Hedge

A financial strategy used to reduce risk by taking offsetting positions in a security and its derivative, ensuring gains in one offset losses in the other.