Juan Carlos Cashed in a Savings Bond That Had Earned

question 79

Multiple Choice

Juan Carlos cashed in a savings bond that had earned $400 in interest. His tax bracket is 12%, and his state charges 6% on investment income. How much tax will Juan Carlos pay on the interest from the bond?

• A) $48.
• B) $36.
• C) $24.
• D) $0.

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Definitions:

Expected Return

The average of all possible returns from an investment, weighted by their probabilities.

Market

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An indicator of a stock's fluctuation compared to the general market, where a beta above 1 signals increased volatility.

Risk-Free Rate

An estimated profit from a risk-free investment, commonly illustrated by government security yields.