Jan Has Been Assigned to the Rome Office of ABC

question 34

Multiple Choice

Jan has been assigned to the Rome office of ABC Corporation.She arrives in Rome on November 1,2012 and does not return to the U.S.until March 5,2015.During her stay in Rome,Jan earned $102,000 in 2014. Jan may exclude

• A)$0.
• B)$2,800.
• C)$99,200.
• D)$102,000.

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Definitions:

Arbitrage

The simultaneous purchase and sale of the same assets in different markets to exploit price differences for a profit.

Risk-free Rate

The expected yield from an investment that carries no risk of losing money, often identified by the returns on government bonds.

Futures Market

A financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.

Stock Index Futures

Futures contracts that obligate the buyer to purchase or the seller to sell a specific stock index at a predetermined future date and price.