Treasury bill
<span>It's a short-term debt backed by the U.S.
government with a limit of one year, It's sold in denominations
of $1,000. The maximum purchase is $5 million </span>
Answer:the total amount of income J.D. recognizes related to Clampett, Incorporated, in 2021 =$5,000
Explanation:
Income of J.D related to Clampett = Ordinary income + Capital gain
Given that Basis distribution = $50,000
Basis stock = $45,000
Ordinary income = $10,000
But Capital gain = Basis distribution -( Basis stock + Ordinary income)
Capital gain = $50,000 - ($45,000 +$10,000)
Capital gain = $50,000 - $55,000
Capital gain = = - $5,000
Therefore J.D. income related to Clampett = Ordinary income + Capital gain =$10,000 +(- $5,000)
=$10,000 - $5,000
=$5,000
The third one is most appropriate ! as it shows that the money can be stored and later we can use !
Answer:
The answer is option C. She may immediately sell the bonds but it is unclear how much money they will sell for.
Explanation:
She may immediately sell the bonds but it is unclear how much money they will sell for.
Investors who hold onto their bonds until maturity are assured of to receive the face value of the bond. In our case, if Andrea would have chosen to hold her $5,000 bond investment for 10 years, she would have been assured the bonds face value, however since she prefers to use the cash to work abroad, she can sell the bonds immediately.
Selling a bond before it's maturity date can either be beneficial or detrimental. This depends on the value of the bond at the time of sale. If at the time of sale the bond would have gained value, then the bond will sell at a higher price than when it was bought. On the other hand, if the bond at the time of sale has lost value, then the bond will sell at a lower price than the price which it was bought.
In our case, the best option for Andrea would be to sell the bonds immediately, since she really needs the cash. If it happens that at the point at which she sells the bonds they will have gained value, then she will have more than $5,000 cash, however, if at the point she decides to sell the bonds they will have lost value, then she will have less than $5,000 depending on how much value was lost from the time she bought the bonds and the time she sold the bonds.
