AAFM Exam GLO_CWM_LVL_1 Topic 1 Question 84 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam

Question #: 84
Topic #: 1

You are considering investing in following bond:

Your income tax rate is 34 percent and your capital gains tax is effectively 10 percent. Capital gains taxes are paid at the time of maturity on the difference between the purchase price and par value. What is your approximate post-tax yield to maturity on this bond?

A10.91%

B11.38%

C9.07%

D11.78%

Show Suggested Answer

Suggested Answer: C

by Theodora at Jul 07, 2024, 08:52 PM

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Maurine

8 days ago

This question is tricky! Gotta remember to factor in both income tax and capital gains tax. Time to break out the calculator.

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Jeanice

13 days ago

But don't forget to consider the taxes, it might affect the post-tax yield

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Remona

16 days ago

I disagree, I believe the correct answer is D) 11.78%

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Jeanice

25 days ago

I think the answer is A) 10.91%

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