Multiple choice

Investors who acquire sudden wealth

  1. can speculate with all the acquire, money in the stock markets

  2. should not use any of the new wealth to invest in equity

  3. should take the effect of taxes into account

  4. need not pay any taxes on the newly acquired wealth as it is not a part of their regular income
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sudden wealth events like inheritance or lottery winnings have significant tax implications that must be considered in investment planning. Speculating all (A) is reckless. Avoiding equity entirely (B) is overly conservative. Tax-free status (D) is incorrect - windfalls are generally taxable. Tax planning is essential when sudden wealth is acquired.

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