Personal Finance Homework Help??

Shane Getler: 1) Condo appreciation isn't recognized until sold... this depends on how long you plan on keeping the house, as this matters in if the profit from the appreciation is considered short term or long term. If the home is a primary residence or a vacation home makes a big impact also. 2) Municipal Bonds are tax-free with most State taxes... but is pointless if you don't have a state-tax(several years back, there were only 5 states that had no state income tax--not sure if this has changed3)Dividends are generally taxed4)Interest on savings are generally taxed5)Stocks are generally not taxed until sold(profits are not realized until sold), however they will be taxed eventually... but how much is taxed depends on if it's short term gains or long term gains. Also, this all depends on if you have enough 'write-offs' to offset the interest/dividends earned on these investments.To find the after-tax yield, you would use: (1-t)(i) ; with 't' being the tax rate and 'i! ' being the pre-tax yield. Your book probably has a cookie-cut answer instead of considering all the different angles I gave. You may want to look there to confirm my answer and check for any gaps.I would never recommend an investment, but just provide the information for them to make a calculated decision for themselves. None of these even consider the 'Beta' or risk of the investments(using the 'Capital Asset Pricing Model')... with more risk, there should be more reward....Show more