1. Jordan sold a stock that he held for 11 months at a capital gain of $10,000 He is in the 25% marginal tax bracket. What taxes will he pay on this gain?
The amount Jordan will pay in taxes is $
2. Selecting a CD. Casey has $1,000 to invest in a certificate of deposit. Her local bank offers her 2.50% on a 12-month FDIC-insured CD. A nonfinancial institution offers her 5.20%
on a 12-month CD. What is the risk? premium? What else must Casey consider in choosing between the two CDs?
The risk premium is %
Casey must also consider
A. that if she only needs access to the money after a long period of time, the nonfinancial institution's CD might be too risky.
B. the bank's risk tolerance
C. that if she needs access to the money in a short period of time, the nonfinancial institution's CD might be too risky.
D. the government's risk tolerance.