You Buy a T-Bill, Which Has a Par Value of $10,000

question 48

Multiple Choice

You buy a T-bill, which has a par value of $10,000 for $9,600 and the T-bill has a one-year maturity. What will be your return?

• A) 2.5%
• B) 4.2%
• C) 4.8%
• D) 6.0%

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Definitions:

FICA Taxes

Taxes imposed by the Federal Insurance Contributions Act on both employees and employers to fund Social Security and Medicare.

Federal Withholding

The process by which an employer withholds a portion of an employee's income to cover federal income taxes.

COBRA Premium Assistance

COBRA Premium Assistance refers to a subsidy for the health insurance premiums under the Consolidated Omnibus Budget Reconciliation Act, providing temporary continuation of health coverage at group rates.

Form 941-X

A form used by employers to correct mistakes made on a previously filed Form 941, which reports quarterly federal tax returns.