A mutual fund has a turnover of 25% and a potential capital gains exposura (PCGE) of 75%. You are considering buying this fund in a taxable account. Which of the following is an accurate statement? O You should be concemed about the PCGE, but the low turnover mutes the potential tax risk O You would be more concemed if this asset were being considered for an IRA account. O You should only be concermed if the PCGE represents long-term capital gains You do not need to be concerned about the PCGE because this fund is held in a taxable account.
A mutual fund has a turnover of 25% and a potential capital gains exposura (PCGE) of 75%. You are considering buying this fund in a taxable account. Which of the following is an accurate statement? O You should be concemed about the PCGE, but the low turnover mutes the potential tax risk O You would be more concemed if this asset were being considered for an IRA account. O You should only be concermed if the PCGE represents long-term capital gains You do not need to be concerned about the PCGE because this fund is held in a taxable account.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
2
Transcribed Image Text:A mutual fund has a turnover of 25% and a potential capital gains exposure (PCGE) of 75%. You are considering
buying this fund in a taxable account. Which of the following is an accurate statement?
O You should be concemed about the PCGE, but the low turnover mutes the polential tax risk
O You would be more concermed if this asset were being considered for an IRA account.
O You should only be concerned if the PCGE represents long-term capital gains.
O You do not need to be concerned about the PCGE because this fund is held in a taxable account.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education