Consider the Following Four Investors

question 74

Essay

Consider the following four investors. Rank each according to who has the most to gain from investing in 30-year tax-exempt municipal bonds. Each investor has $1,000 in a savings account that he/she plans to use to buy bonds. Explain briefly why you ranked the investors this way.
(a) A 20-year old college student who earns low income through working over summers and breaks. The student plans to graduate next year.
(b) The CEO of a large company who is currently in the highest tax bracket. (c) A middle-income household saving up to move into a larger home.
(d) A 60-year old nurse who plans to retire at age 62. He uses a tax-exempt pension fund for all of his savings.

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Definitions:

Interdependence

The mutual reliance between different species, systems, or processes in an ecosystem, illustrating how a change in one can affect others.

Fundamental Ecosystems

Basic ecological units comprised of living organisms and their physical environment, interacting as a system.

Planetary Management

Planetary management is a worldview that regards the Earth as a system to be managed for the benefit of humans, focusing on the manipulation of natural systems to meet human needs.

Economic Growth

The increase in the market value of the goods and services produced by an economy over time, often measured as the percent rate of increase in the real gross domestic product (GDP).