From the Time of Benjamin Franklin to the Present,the Percentage

question 161

Multiple Choice

From the time of Benjamin Franklin to the present,the percentage of the average American's income that goes to pay taxes

• A) has decreased from about 20 percent to about 10 percent.
• B) has remained constant at about 10 percent.
• C) has risen from less than 2 percent to about 44.4 percent.
• D) has risen from less than 5 percent to about 33.3 percent.

---

Definitions:

Coupon Bond

A coupon bond is a debt security that pays the holder periodic interest payments based on a fixed interest rate until the bond matures, at which point the face value is paid to the bondholder.

Substitution Swap

Exchange of one bond for another more attractively priced bond with similar attributes.

Duration

An indicator that represents how the price of a bond or any similar type of debt is affected by interest rate fluctuations, displayed as a duration in years.

Mispricing

Situations where the market price of an asset deviates from its theoretical or intrinsic value.