Turnover rate :(a)3.5% (b)42.0% Which investment is likely to have the greater tax penalty? Why?
Turnover rate :(a)3.5% (b)42.0% Which investment is likely to have the greater tax penalty? Why?
Homework Answers
Investment (b). Having turnover rate of 42% is likely to have the greater tax penalty.
Reason - portfolio having high turnover rate is the one which results in high capital gain tax. And this capital gain tax is beared by investors.
Therefore, the correct answer is option (b), 42%.
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Turnover rate :(a)3.5% (b)42.0% Which investment is likely to
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