Kevin Wants to Know If He Can Claim His Brother,Richard,as

question 95

Multiple Choice

Kevin wants to know if he can claim his brother,Richard,as a qualifying relative for income tax purposes.Richard is 18 and is a part-time student at City Community College.He lives with Kevin in his home for the entire tax year.Kevin provides the majority of Richard's support.During the year Richard has the following items of income:

$\begin{array}{llcc} \text { State of Oklahoma bond interest }& \$ 1,000\\ \text { Dividends on General Motors stock}& \$ 700\\ \text { Employee wages from part-time work }& \$ 2,900\\\end{array}$

Can Kevin claim his brother Richard as a dependent for income tax purposes?

• A)Yes.
• B)No, Richard fails the relationship test.
• C)No, Richard fails the gross income test.
• D)No, Richard fails the student test.
• E)No, Richard fails the residency test.

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Definitions:

Security's Beta

A measure of a stock's volatility in comparison to the overall market; a beta greater than 1 indicates higher volatility than the market, while a beta less than 1 indicates lower volatility.

Security Market Line

A line that represents the relationship between risk and expected return in capital market theory, often used in the capital asset pricing model.

Beta

Beta is a measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates that the stock is more volatile than the market, while a beta less than 1 means it is less volatile.

Regression Line

A straight line that best fits the data points in a scatter plot, used in statistics to model the relationship between two variables.