Homework Clinic
Social Science Clinic => Accounting => Topic started by: michelleunicorn on Sep 13, 2020
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Question 1
The difference between the BTRORs of fully-taxable and tax-favored investments is called
◦ an explicit tax.
◦ an implicit tax.
◦ an effective tax.
◦ a marginal tax.
Question 2
Which of the following concerning implicit taxes and clienteles is not true?
◦ Market forces drive down the BTROR of tax-favored assets.
◦ The reduced return of tax-favored assets is an implicit tax.
◦ Investors whose tax rate exceeds that of the marginal investor can reap some benefit through the clientele effect.
◦ Marginal investors will always benefit from the implicit tax on tax-favored investments.
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Answer 1
an implicit tax.
Answer 2
Marginal investors will always benefit from the implicit tax on tax-favored investments.