Which One of the Following Statements Is Correct Concerning the Taxation

question 68

Multiple Choice

Which one of the following statements is correct concerning the taxation of dividends and capital gains?

• A)Seventy percent of capital gains derived from stock investments are tax exempt for corporate investors.
• B)Dividends are a form of tax-exempt income for individual investors.
• C)All investors are subject to the same tax rate on dividend income.
• D)Individual investors can defer taxation on both dividends and capital gains.
• E)As of 2015, individual investors pay a tax rate that varies from 0 to 15 percent on dividend income.

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Definitions:

Population Values

The actual numerical values representing a characteristic of every individual member of a population.

Confidence Level

A measure indicating the probability that a given range includes the true value of an estimated parameter.

Confidence Interval

A confidence interval is a range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter, with a specified level of confidence.

Alpha (α)

In investing, alpha represents the excess returns of a portfolio relative to the return of a benchmark index. In statistics, it often denotes the level of significance in hypothesis testing.