The Best Choice for Someone Who Makes Occasional Spur-Of-The-Moment Purchases

question 33

Multiple Choice

The best choice for someone who makes occasional spur-of-the-moment purchases is

• A)a money market mutual fund.
• B)a passbook savings account.
• C)a certificate of deposit.
• D)a U.S.Series HH bond.

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Definitions:

Basis

The amount of an investment in property for tax purposes; the starting point for determining gain or loss.

Recognize Gain

The process of reporting the profit from a sale or exchange of an asset for tax purposes.

Dividend Income

Income received from owning shares of stock or mutual funds, which represents a portion of the company's profits distributed to its shareholders.

Domestic Corporation

A corporation that is incorporated under the laws of a specific country and conducts its operations primarily within that country.