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Are Gifts Taxable as Income?
Course: Income Tax Planning Lesson 5: Gross Income Exclusions Student Question: In the Gifts & Inheritance section of Income Tax Planning and, how come there is not mention of the $15,000 gift tax limit. All it says is that gifts can be excluded from Gross Income. The amount of gifts excluded from taxable income is limited,…
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Standard Deviation
Big Blue Company stock has an average return of 7% and a standard deviation of 3%. What percentage of the time should an investor in Big Blue Company expect to earn 4% or more? A.34% 68% 84% 95% CLICK TO REVEAL ANSWER C is the answer. Big Blue Company will earn between 4% and 11%,…
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Good to Know: Who Needs Long-Term Care Insurance?
What are the odds you’ll need long-term care? Long-term care is a distinct possibility for millions of Americans. Today’s baby-boomers and their parents are living longer, but longer life expectancies are often accompanied by a need for extended long-term care. According to the American Society on Aging, 70% of Americans 65 and older will need…
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Corporate Dividend Exclusion
Course: Investment Planning Lesson 3: Equity Securities Student Question: I don’t quite understand the corporate dividend exclusion. A corporation can exclude 70% of dividends from a different company when they own less than 20%. I don’t understand what happens when they own more than 20%. Also, is there a rule preventing companies from investing in…
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Systematic Risk
Which of the following statements concerning systematic risk is correct? It can be greatly reduced by owning a diversified portfolio of common stocks. It covers those types of risks that cause all securities to move together in a systematic manner. Business risk, such as a strike at an individual firm, is considered systematic risk. It…
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CFP Board Webinar: Roadmap to the New Code of Ethics and Standards of Conduct
As we are all aware, the new Code of Ethics and Standards of Conduct become effective on October 1, 2019. Many CFP® Professionals and those working towards the certification are anxious about what exactly will be changing. In response, the CFP Board will be hosting a webinar dedicated to distilling the essential information about the…
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In the Money versus Out of the Money
Course: Investment Planning Lesson 3: Equity Securities Student Question: Hi Bruce, In reviewing the tax implications of derivatives, I had a question about the terms in & out of money. Is premium price factored into whether something is in or out of money? Or is it strictly referring to market and strike price? Thanks, Instructor…
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Call Features of Bonds
Which of the following statements concerning the call feature of a bond is not correct? If it is freely callable, the issuer may retire the bond at any time. If it is noncallable, the issuer may retire the bond prematurely by repurchasing it. If the bond carries a deferred call, the issuer may not retire…
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Good to Know: 4 Dangerous Gaps in Long-Term Disability Coverage
Saying “I have a long-term disability policy” is very much like saying “I have a car.” There’s a big difference between a new Mercedes S-Class and a 40-year old AMC Concord (for any Millennials reading this, the Concord was manufactured just after the extinction of the dinosaurs by a now-defunct automaker). Here’s my point –…
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