Zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds because: a.Zero-coupon bonds are sold for nearly their full face value and provide most of their income in the form of interest. b.Zero-coupon bonds allow the investor to make additional tax-exempt investments. c.The interest earned on the accumulated principal and interest is not tax-exempt. d.The investments pay interest continually. e.Zero-coupon bonds include more transaction fees.
Zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds because: a.Zero-coupon bonds are sold for nearly their full face value and provide most of their income in the form of interest. b.Zero-coupon bonds allow the investor to make additional tax-exempt investments. c.The interest earned on the accumulated principal and interest is not tax-exempt. d.The investments pay interest continually. e.Zero-coupon bonds include more transaction fees.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7. Zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds because:
a.Zero-coupon bonds are sold for nearly their full face value and provide most of their income in the form of interest.
b.Zero-coupon bonds allow the investor to make additional tax-exempt investments.
c.The interest earned on the accumulated principal and interest is not tax-exempt.
d.The investments pay interest continually.
e.Zero-coupon bonds include more transaction fees.
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