Jake Invested $800 in an IRA

question 53

Multiple Choice

Jake invested $800 in an IRA.If he has a 15 percent marginal tax rate and the contribution is tax deductible,Jake will

• A)pay $120 more in taxes.
• B)pay $120 less in taxes.
• C)receive no change to his tax liability.
• D)have $800 more in adjusted gross income.

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Definitions:

Fama and French

Economist researchers known for their development of a three-factor model to explain stock returns based on market risk, size, and book-to-market value factors.

Firm Size

A measure of a company's size, often determined by its market capitalization, number of employees, or total assets.

Explanatory Power

The ability of a statistical model to account for a variation in a dependent variable through one or more independent variables.

Benchmark Error

A discrepancy between the performance of a benchmark index and the target performance of a fund or investment strategy it is supposed to represent.