A Tax Exempt Money Market Fund Has an Annual Return

question 65

Multiple Choice

A tax exempt money market fund has an annual return of 3.76 percent.What is your equivalent taxable rate if you are in a 28 percent marginal tax bracket?

• A) 3.15 percent
• B) 3.38 percent
• C) 5.22 percent
• D) 6.11 percent
• E) 6.81 percent

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Definitions:

Tax

An inescapable financial demand or another sort of fee imposed on a taxpayer by an arm of the government to fulfill government spending requisites and diverse expenditures for public services.

Good

An item or product that can be bought, sold, or provided in an exchange and is intended to satisfy a want or need.

Burden

In economic contexts, it often refers to the impact of taxes or regulations on individual or corporate finances.

Tax

Mandatory financial contributions imposed by governments on individuals, businesses, or transactions to finance government activities.