Tax & EvaluationPregunta 110 de 110
A customer in a high federal tax bracket wants current income in a taxable account and is comfortable with moderate interest rate risk. Which recommendation best fits?
a.A high-yield corporate bond fund inside an IRA
b.A municipal bond fund, whose income is generally exempt from federal income tax
c.A growth fund that pays no dividends
d.A money market fund
Explicación
Tax-exempt interest is worth the most to investors in high brackets, so a municipal bond fund can deliver a better after-tax yield than a comparable taxable fund. A growth fund does not provide current income, and a money market fund provides income but with minimal yield and no tax advantage. Placing a taxable high-yield fund in an IRA does not address a customer who wants income in a taxable account now.
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