One Aspect of the Tax Considerations in Asset Allocation Is

question 39

Multiple Choice

One aspect of the tax considerations in asset allocation is that

• A)capital gains are often taxed at a higher rate than income.
• B)current income is seldom a significant consideration for an investor in the spending phase of the life cycle.
• C)investors are exempt from taxes on capital gains once they reach age 65.
• D)taxes on capital gains are deferred until the gain is realized.

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Definitions:

F-Statistic

A statistical value calculated in various tests (e.g., ANOVA) that measures the ratio of variance between groups to the variance within groups, used to determine the significance of certain variables in a model.

P-Value

The probability of obtaining test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is correct.

Cost Behaviour

The study of how specific costs change in relation to changes in a company’s level of activity or volume of production.

Cost Predictions

The process of estimating the costs that a company will incur over a specific period, often used for budgeting and financial planning purposes.