You are in the process of reviewing several client files regarding the income tax implications of various

investments they hold.

Which of your clients has effectively used the strategies of tax deferral and conversion?

1 Mr Jones, who paid all the bills while Mrs Jones who is in a lower tax bracket that Mr Jones invested her income

2 Betty, who contributed $10,000 to her RRSP, deducted the contribution, and will have a lower effective tax rae during retirement

3 Barney, who borrowed money last year to purchase equity mutual funds

4 Floria, who used the proceeds from the sale of her principal residence to purchase a retirement retreat in Bermuda

1 and 2

2 and 3

1 and 3

3 and 4