Morris Is Considering Investing in Some Bonds

question 65

Multiple Choice

Morris is considering investing in some bonds.Morris is in the 33% tax bracket.His broker tells him about City of Fargo,North Dakota,bonds with a yield of 6%.

• A)A U.S. Treasury bond paying 6% interest will have a greater after-tax yield than the City of Fargo bonds.
• B)A U.S. Treasury bond paying 6% interest will have the same after-tax yield as the City of Fargo bonds.
• C)The after-tax yield on City of Fargo bonds is 4% [(1.0 - .33) * 6%].
• D)A taxable bond will have to pay 9% (6% ÷ .67) interest to provide an after-tax yield equal to the yield on the City of Fargo bonds.

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Definitions:

Job Rotation

A system in which an employee is moved from one specialized job to another.

Job Enlargement

The process of adding more tasks of similar difficulty to an employee's job role to increase job diversity.

Labour Specialization

The division of labor where individual workers specialize in doing part of a task or job, leading to increased efficiency and productivity.

Specialized Tools

Tools designed for specific tasks or functions, often used to improve efficiency and performance in particular applications.