If an investor has a tax rate on interest income of 30% and the inflation rate is 4%, which bond has the highest expected real after-tax interest rate?
A. A municipal bond paying 6%
B. A corporate bond paying 7%
C. A Treasury bond paying 7%
D. A Treasury bond paying 8%
Answer: A
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The market price of existing bonds is ________ to the rate of interest prevailing in the economy
A) directly related B) inversely related C) synonymous D) totally unrelated
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 5 percent. If the Federal Reserve lowers the required reserve ratio to 3 percent, then the bank will now have excess reserves of
A) $0. B) $2,000. C) $3,000. D) $5,000.
All of the following are possible criticisms of social regulation EXCEPT
A) that the costs may outweigh the benefits. B) that social regulation may create anticompetitive effects. C) that the regulations have not resulted in safer working conditions. D) that the regulations lead to higher production costs.
If a country grows at an average rate of 3.5 % per year over a ten year period, then its compounded growth rate over that period is roughly:
A. 41.0%. B. 35.0%. C. 32.7 %. D. 45.0 %.