The Current Yield Tends to Understate a Bond's Total Return

question 68

Multiple Choice

The current yield tends to understate a bond's total return when the bond sells for a discount because:

• A) increases in interest rates will increase the current yield.
• B) the bond's price will increase each year.
• C) current yields show only nominal returns.
• D) the bond may have a higher face value.

Acknowledge the tax implications and reporting for flow-through entities.

Know about the tax treatment of security deposits and advance rental payments.

Understand how capital improvements and other expenses paid by tenants are treated for tax purposes.

Recognize the correct depreciation method for residential rental properties.

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Definitions:

Alpha Cell

A type of cell in the pancreas that produces glucagon, which helps to increase glucose levels in the bloodstream.

Glucagon

A hormone produced by the pancreas that increases blood glucose levels, acting as a counter-regulatory hormone to insulin.

Gonadotropin-releasing Hormone

Gonadotropin-releasing hormone (GnRH) is a hormone released from the hypothalamus that stimulates the pituitary gland to release gonadotropins and regulate reproductive functions.

Somatostatin

A hormone that inhibits the secretion of several other hormones, including growth hormone and insulin.