Calculate an individual's tax liability if a stock purchase was $500,000 and after a year the value of the stock was $600,000. The ordinary income tax rate for the person is 24% and the long term capital gains rate is 20%. O a. There is no tax because the value of the stock went up but the stock wasn't sold. The gain was not "realized." b. The stock was held for a year but the individual has salary income as well so the tax rate is 24%. $100,000 @249 = $24,000 O c. The stock was held for a year so the capital gains tax applies. The capital gain was $100,000 @20% = $20,000 d. The individual has to pay 2496 of the value of the stock whenever it's sold. The tax will be $600,000 @24% = $144,000 sometime in the future. QUESTION 14 If the 10 year Treasury Bond yield is currently 0.66% and the current inflation rate is 196, a. The "real rate of interest" is -0.34 % b. The "real rate of interest" is 0.34 95 c. The "real rate of interest" is 3496 d. The inflation rate is less than the yield so the bondholder is not "losing purchasing power" Yields are a combination of the coupon rate on a note or bond and the capital gain or capital loss that the holder will receive if the bond is held to maturity. The 10 year note on September 17th 2020 was about 0.68%, notice that it was less than one percentage point. if the yield goes up to 0.796, that small increase would be measured in "basis points." How many basis points did the yield go up? Traders in fixed income securities try to make a profit on small changes. They have to trade hundreds of millions of note/bonds to make money trading. a. 20 basis points b. Two basis points OC. .02 percent O d. $20,000 QUESTION 16 Which of the following has the lowest interest rate? a. The Federal Funds rate b. The 30 year fixed rate mortgage OC. Corporate bond rates Od. The prime rate Each of the following is traded in the money market except: a. T-bills b. they are all traded in the money market in the secondary market) C. commercial paper O d. stock