Which of the Following Statements Is True

question 72

Multiple Choice

Which of the following statements is true?

• A) Because coupon payments on tax-exempt bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in higher income tax brackets.
• B) An increase in tax rates will decrease the demand for tax-exempt bonds, lowering their interest rates.
• C) Interest rates on tax-exempt bonds will be higher than comparable bonds without the tax exemption.
• D) Because coupon payments on tax-exempt are exempt from federal income tax, the expected after-tax return on them will be lower for individuals in higher income tax brackets.

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Relating to moral principles or the branch of knowledge dealing with these, especially as they apply to professional conduct.

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