Britney Is Beneficiary of a $150,000 Insurance Policy on Her

question 35

Multiple Choice

Britney is beneficiary of a $150,000 insurance policy on her father's life.Upon his death,she may elect to receive the proceeds in five yearly installments of $32,000 or may take the $150,000 lump sum.She elects to take the lump sum payment.What are the tax consequences in year one?

• A)All $32,000 each year is taxable.
• B)$10,000 interest is taxable in the first year.
• C)There is no taxable income.
• D)The lump sum payment is taxable.

Grasp the concept of confidence intervals and their application in financial returns.

Calculate and interpret capital gains yield.

Understand the concept of geometric average rate of return and how to calculate it.

Understand and calculate the excess return on risk-free securities.

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Definitions:

Buyer's Inventory

The stock of goods a purchaser has on hand, which represents a current asset on the balance sheet that is intended for resale or use in production.

Credit Terms

The conditions, including payment timing and interest, under which credit will be extended to a borrower.

Discount

A reduction in the price of goods or services, typically offered to prompt sales or recognized in the context of financial instruments.