Case Study #2 Answers
{"Image DocumentName": "Case Study #2 Answers", "Image ImageDescription": "Regarding fund A, Bill must pay 35% or  3.50 in taxes on a ten dollar distribution. Thus, his nominal return is 10%, his after-tax return is 9.65%, and he loses 0.35% to taxes. Regarding fund B, Bill must pay 35% or 31.5\u00a2 in taxes on a ninety-cent distribution. Thus, his nominal return is 10% but his after-tax return is 6.85%, and he loses 3.15% to taxes. Although both funds have the same nominal return and the same tax rate, fund B\u2019s return is 29% lower because of taxes related to higher turnover. Clearly, understanding taxes is very important. Know your tax-rate on each type of earnings.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}