Curtis Invests $250,000 in a City of Athens Bond That

question 33

Multiple Choice

Curtis invests $250,000 in a city of Athens bond that pays 7% interest. Alternatively, Curtis could have invested the $250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24%. How much implicit tax would Curtis pay on the city of Athens bond?

• A) $17,500
• B) $1,400
• C) $1,300
• D) $5,000
• E) None of the choices are correct.

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Definitions:

Scleral Venous Sinus

A circular channel in the eye that drains aqueous humor from the eye into the bloodstream, also known as the Canal of Schlemm.

Aqueous Humor

is a clear fluid located in the front and between the lens and the cornea of the eye, helping to maintain intraocular pressure and provide nutrients to the eye tissues.

Anterior Cavity

A body cavity located at the front part of the body, which includes the thoracic and abdominopelvic cavities, housing major organs.

Fovea Centralis

A small depression in the retina of the eye where visual acuity is highest, owing to a high density of cones.