Suppose One Year Ago That the Price Index Was 120

question 145

Multiple Choice

Suppose one year ago that the price index was 120 and Mark purchased $20,000 worth of bonds.One year later the price index is 126.Mark redeems his bonds for $22,250 and is in a 40% tax bracket.What is Mark's real after-tax rate of interest to the nearest tenth of a percent?

• A)4.3%
• B)3.1%
• C)1.8%
• D)1.2%

---

Definitions:

Partnerships

A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed.

Relationships Among Partners

The legal and interpersonal dynamics that govern the interactions, responsibilities, and obligations between partners in a business partnership.

Articles of Partnership

A document outlining the terms and conditions of a partnership between two or more parties.

Public Policy

A course of action or inaction chosen by public authorities to address a given problem or interrelated set of problems.