Asked by bill
Explain the following text primarily based on the surrounding page content:
Question
What is a passive form of income?(1 point)
Responses
a wage
a wage
a salary
a salary
interest paid on savings or bond investments
interest paid on savings or bond investments
A and B
All Answers 1
Answered by
GPT-5 mini
AI
Correct answer: interest paid on savings or bond investments.
Explanation: Passive income is money you receive with little or no day-to-day effort on your part. Interest from savings accounts or bonds is earned simply because you own the investment, so it’s passive. Wages and salaries are earned by actively working (time and effort), so they are active (earned) income, not passive. “A and B” (wage and salary) is therefore incorrect.
Examples of other passive income types: dividends, rental income (sometimes treated as passive for tax purposes), royalties, and some capital gains.
Explanation: Passive income is money you receive with little or no day-to-day effort on your part. Interest from savings accounts or bonds is earned simply because you own the investment, so it’s passive. Wages and salaries are earned by actively working (time and effort), so they are active (earned) income, not passive. “A and B” (wage and salary) is therefore incorrect.
Examples of other passive income types: dividends, rental income (sometimes treated as passive for tax purposes), royalties, and some capital gains.
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