If the 10 year Treasury Bond yield is currently 0.66% and the current inflation rate is 1%,

	a.	The "real rate of interest" is -0.34 %
	b.	The "real rate of interest" is 0.34 %
	c.	The inflation rate is less than the yield so the bondholder is not "losing purchasing power"
	d.	The "real rate of interest" is 34%

Which of the following is false?

	a.	Treasury bills are short term liabilities of the Treasury and Treasury bonds are long term liabilities of the Treasury
	b.	People invest in U.S. government bonds because they are relatively safe
	c.	In the U.S. the medium of exchange is the dollar, the unit of account is called the dollar and the dollar is also a store of value
	d.	Financial markets and financial securities are synonyms

Which of the following has the lowest interest rate?

	a.	Corporate bond rates
	b.	The Federal Funds rate
	c.	The prime rate
	d.	The 30 year fixed rate mortgage

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%.

	a.	The individual has to pay 24% of the value of the stock whenever it's sold. The tax will be $600,000 @24% = $144,000 sometime in the future.
	b.	The stock was held for a year so the capital gains tax applies. The capital gain was $100,000 @20% = $20,000
	c.	There is no tax because the value of the stock went up but the stock wasn't sold. The gain was not "realized."
	d.	The stock was held for a year but the individual has salary income as well so the tax rate is 24%. $100,000 @24% = $24,000