For Most Investors, the Equalization of the Tax Rates on Capital

question 95

Multiple Choice

For most investors, the equalization of the tax rates on capital gains and dividends did which of the following?

• A) Moved the real world further from the concept of the dividend indifference theory
• B) Moved the real world closer to the concept of the dividend indifference theory
• C) Moved the real world closer to the concept of the dividend irrelevance theorem
• D) Moved the real world further from the concept of the dividend irrelevance theorem

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Definitions:

Debt Returns

The earnings generated from investments in debt instruments, such as bonds, through interest payments or capital gains.

Inflation Rate

The speed at which overall prices for goods and services increase, leading to a decrease in buying power.

High Net Worth

A term used to describe individuals whose total value of financial assets, excluding their primary residence, is significantly higher than the average, often implying greater financial security and investment capacity.

Diversified

An investment strategy that spreads risk by allocating investments among various financial instruments, industries, and other categories to reduce exposure to any single asset or risk.