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The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio? O Bonds provide regular interest income which can be flowed out directly to investors. O Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders. O Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment. O To increase the dividend yield and credit quality of the mutual fund

The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio? O Bonds provide regular interest income which can be flowed out directly to investors. O Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders. O Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment. O To increase the dividend yield and credit quality of the mutual fund

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
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The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio? O Bonds provide regular interest income which can be flowed out directly to investors. Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders. O Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment. To increase the dividend yield and credit quality of the mutual fund
Transcribed Image Text:The portfolio manager of the High Income Fund has 90% of the mutual fund invested in bonds. What is a reason for holding bonds in a mutual fund portfolio? O Bonds provide regular interest income which can be flowed out directly to investors. Bonds produce regular capital gain payments which result in preferential tax treatment for unitholders. O Coupon payments paid by bonds from large Canadian corporations are eligible for preferential tax treatment. To increase the dividend yield and credit quality of the mutual fund
Lior is considering an investment that gains exposure to companies that trade on the Toronto Stock Exchange (TSX). He is not sure what the differences are between a Canadian equity fund and a Canadian dividend fund. What would you tell him? Equity funds are more appropriate than dividend funds if Lior requires a steady flow of income. O Equity funds hold common shares while dividend funds hold only preferred shares. Dividend funds tend to be less volatile and lower risk than equity funds. O Dividend funds generate tax-preferred income while income from equity funds is fully taxable.
Transcribed Image Text:Lior is considering an investment that gains exposure to companies that trade on the Toronto Stock Exchange (TSX). He is not sure what the differences are between a Canadian equity fund and a Canadian dividend fund. What would you tell him? Equity funds are more appropriate than dividend funds if Lior requires a steady flow of income. O Equity funds hold common shares while dividend funds hold only preferred shares. Dividend funds tend to be less volatile and lower risk than equity funds. O Dividend funds generate tax-preferred income while income from equity funds is fully taxable.
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