Ad Valorem Taxation Means

question 138

Multiple Choice

Ad valorem taxation means

• A) that only the value added by a service provider is taxed.
• B) that the tax rate is a percentage of the price paid for a product.
• C) a negative income tax.
• D) a progressive property tax imposed in some states.

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Definitions:

Maintenance Margin

The minimum amount of equity an investor must maintain in a margin account after the purchase has been made, to keep the position open.

Interest Rate Swaps

Financial derivatives contracts where two parties exchange interest rate payments on a specified principal amount, typically exchanging fixed for floating rates.

Fixed-rate Bonds

Fixed-rate Bonds are bonds that pay the same rate of interest from issue until maturity, regardless of changes in market interest rates.

Floating-rate Bonds

Bonds whose interest rate payments adjust periodically based on an underlying benchmark, making them less sensitive to interest rate changes.