Suppose the Interest Rate on New Issues of Canada Savings

question 3

Multiple Choice

Suppose the interest rate on new issues of Canada Savings Bonds is 5% per year and the federal income tax rate on nominal interest earnings is 40%.If the inflation rate is 3%,then an investor's after-tax real rate of return on Canada savings Bonds is

• A) 5%.
• B) 4%.
• C) 3%.
• D) 2%.
• E) 0%.

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Definitions:

Special Treatment

Preferential or distinct consideration given to an individual or group, often based on specific needs, status, or criteria.

Correlation

The extent to which two variables are related to each other.

Dependent Variable

In research, the variable that is being tested and measured to see if it is affected by changes in another variable.

High-protein Breakfast

A morning meal rich in proteins, which can include eggs, Greek yogurt, or lean meats, believed to aid in satiety and weight management.