Which of the Following Is NOT Considered a "Cost of Carry

question 131

Multiple Choice

Which of the following is NOT considered a "cost of carry"?

• A) commissions for physical storage
• B) an opportunity cost for the net amount of invested capital
• C) a premium for the convenience of consuming the asset now
• D) a risk premium for uncertainty
• E) the intrinsic price of the underlying

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Definitions:

AMTI

Stands for Alternative Minimum Taxable Income, which is calculated by adding certain tax preference items back into adjusted gross income.

Incentive Stock Options

A type of stock option that provides tax advantages for the employee, including delayed tax implications until the stock is sold.

AMT Adjustment

Adjustments and preferences added back to or subtracted from taxable income to calculate the Alternative Minimum Tax.

Market Value

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion.