Forward Contracts Rarely Require a Performance Guarantee or Collateral

question 31

True/False

Forward contracts rarely require a performance guarantee or collateral.

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Definitions:

Personal Exemption

A deduction allowed by the IRS from taxable income for the taxpayer and each qualified dependent, diminishing until eliminated in tax year 2018 under the Tax Cuts and Jobs Act.

AGI

Adjusted Gross Income; an individual's total gross income minus specific deductions, used to determine taxable income.

Dependent

An individual, typically a child or family member, whose maintenance and support can be claimed as a deduction by another, usually for tax purposes.

Head of Household

A tax filing status for individuals who are unmarried or considered unmarried, provide more than half of the household expenses, and have a qualifying person living with them.