53. In
order for you to be indifferent between the after tax returns on a corporate
bond paying 9% and a tax-exempt municipal bond paying 7%, what would your tax
bracket need to be?
A. 17.6%
B. 27%
C. 22.2%
D. 19.8%
E. Cannot
tell from the information given
54. In
order for you to be indifferent between the after tax returns on a corporate
bond paying 7% and a tax-exempt municipal bond paying 5.5%, what would your tax
bracket need to be?
A. 22.6%
B. 21.4%
C. 26.2%
D. 19.8%
E. Cannot
tell from the information given
55. An
investor purchases one municipal and one corporate bond that pay rates of
return of 6% and 8%, respectively. If the investor is in the 25% marginal tax
bracket, his or her after tax rates of return on the municipal and corporate
bonds would be ________ and ______, respectively.
A. 6%
and 8%
B. 4.5%
and 6%
C. 4.5%
and 8%
D. 6%
and 6%
E. None
of the above
56. An
investor purchases one municipal and one corporate bond that pay rates of
return of 7.2% and 9.1%, respectively. If the investor is in the 15% marginal
tax bracket, his or her after tax rates of return on the municipal and
corporate bonds would be ________ and ______, respectively.
A. 7.2%
and 9.1%
B. 7.2%
and 7.735%
C. 6.12%
and 7.735%
D. 8.471%
and 9.1%
E. None
of the above
57. For a
taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currently
yielding 5.5% would offer an equivalent taxable yield of:
A. 7.33%.
B. 10.75%.
C. 5.5%.
D. 4.125%.
E. none
of the above.
58. For a
taxpayer in the 15% marginal tax bracket, a 15-year municipal bond currently
yielding 6.2% would offer an equivalent taxable yield of:
A. 6.2%.
B. 5.27%.
C. 8.32%.
D. 7.29%.
E. none
of the above.
59. With
regard to a futures contract, the short position is held by
A. the
trader who bought the contract at the largest discount.
B. the
trader who has to travel the farthest distance to deliver the commodity.
C. the
trader who plans to hold the contract open for the lengthiest time period.
D. the
trader who commits to purchasing the commodity on the delivery date.
E. the
trader who commits to delivering the commodity on the delivery date.
60. A
call option allows the buyer to
A. sell
the underlying asset at the exercise price on or before the expiration date.
B. buy
the underlying asset at the exercise price on or before the expiration date.
C. sell
the option in the open market prior to expiration.
D. A
and C.
E. B
and C.
