A Review of the 2017 Tax File of Gregory,a Single

question 119

Multiple Choice

A review of the 2017 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2017 tax status: In 2018,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

• A)include $200 in gross income for 2018.
• B)include $1,200 in gross income for 2018.
• C)reduce 2018's medical expenses by $1,200.
• D)amend the 2018 return.

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Definitions:

Duration

An indicator reflecting how the price of bonds or similar debt securities reacts to fluctuations in interest rates, usually stated in terms of years.

Coupon Rate

The annual interest rate paid by a bond, expressed as a percentage of the bond's face value, determining the periodic interest payments to bondholders.

Par-Value

The nominal or face value of a bond or stock, as stated by the issuer.

Duration

A measure of the sensitivity of a bond’s price to changes in interest rates, expressed as the weighted average time to receive the bond's cash flows.