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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Pls help ASAP

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

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.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education