Which of the Following People Is Currently Engaged in a Trade

question 120

Multiple Choice

Which of the following people is currently engaged in a trade or business?
I.Barry spends 4 hours a day 5 days a week managing his investment portfolio. He watches the market and buys and sells securities when he thinks the market is right. His investment strategy is to realize income from dividends and long-term gains from holding investments for appreciation in value.
II.Jennifer is a full-time realtor, and she owns a house that she rents to Barry and his family for $900 a month. Jennifer provides for the repairs and maintenance of the house, and she stops by monthly to collect the rent and visit with Barry and his family.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Dividend Yield

An economic measure demonstrating the amount a firm distributes in dividends per year as compared to its share price.

Residual Dividend Policy

Residual Dividend Policy is a strategy where a company pays dividends to shareholders from the residual or remaining equity only after all project capital needs are met.

Dividend Market

is a sector of the financial market focused on the buying and selling of dividends or dividend-paying stocks, reflecting investors' interest in income-generating investments.

Net Present Value

A calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time to assess the profitability of an investment.