Which of the Following Statements Are True

question 75

Multiple Choice

Which of the following statements are true?

• A) An increase in tax rates will increase the demand for Treasury bonds, lowering their interest rates.
• B) Because the tax-exempt status of municipal bonds was of little benefit to bond holders when tax rates were low, they had higher interest rates than U.S. government bonds before World War II.
• C) Interest rates on municipal bonds will be higher than comparable bonds without the tax exemption.
• D) Because coupon payments on municipal bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in lower income tax brackets.

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Definitions:

Narrow Islands

Long, slim landforms surrounded by water, often formed by volcanic activity or the buildup of sediment.

Clasts

Fragments or grains of mineral or rock detached from its original position and included within another rock.

Weak Current

A relatively mild or gentle flow of water in a sea, river, or other body of water, which can influence local climates and marine transportation.

Steep Slopes

Land areas where the ground rises sharply, often leading to challenges in construction and increased risk of erosion.