David Has Been Diagnosed with Cancer and Is Expected to Live

question 51

Multiple Choice

David has been diagnosed with cancer and is expected to live less than 18 months.David is covered by a life insurance policy with a $400,000 face amount.David cashes in the policy early under a special option and receives 80% of the face amount or $320,000.In the year of collection,David will report

• A)no income.
• B)$80,000.
• C)$320,000.
• D)$400,000.

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Definitions:

Theory of Planned Behavior

A psychological theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived behavioral control.

Self-Efficacy

An individual’s belief in their capacity to execute behaviors necessary to produce specific performance attainments.

Control Action

Measures or steps taken to manage or regulate a process or system to achieve desired outcomes or maintain stability.

Predictive Ability

describes the capability to accurately forecast future events or outcomes based on current or past data.