In Selecting Investments Consistent with Your Goals, You Should Consider

question 65

Multiple Choice

In selecting investments consistent with your goals, you should consider

• A) rates of return and taxes only.
• B) the pre-tax rate of return only.
• C) annual dividends and taxes only.
• D) risks, returns, and taxes.

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Definitions:

Pay Interest

The act of making periodic payments to lenders as compensation for borrowing money.

Coupon Rate

The yearly rate of interest distributed on a bond, represented as a percentage of its principal value, from the moment it is issued until it reaches its maturity date.

Par Value

The stated value of a financial instrument such as a bond or stock, as declared by the issuer.

Yield To Maturity

The total expected return on a bond if held until it matures, considering both interest payments and capital gains or losses due to the difference between purchase price and maturity value.