The Excise Tax That Is Imposed on Private Foundations for Making

question 95

True/False

The excise tax that is imposed on private foundations for making jeopardizing investments is imposed because the foundation has made speculative investments that put the foundation's income at risk.

---

Definitions:

Fixed-rate Debt

A type of debt instrument where the interest rate remains constant throughout the life of the borrowing.

Floating-rate Debt

A form of borrowing where the interest rate fluctuates over time based on a benchmark or index rate.

Derivative Instrument

A financial contract whose value is derived from the performance of underlying assets, indices, or interest rates.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date.