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Question 1 of 3
Rocky purchases an original issued discount municipal bond with a $10,000 par value maturing in 15 years. For each year that Rocky holds this bond, which of the following is true?
The interest income he receives will be taxable at the federal level, but tax-free at the state level.
His cost basis will be adjusted annually towards par.
He will be required to pay tax on the annual accretion.
The interest income he receives will be tax-free at the federal level, but taxable at the state level.
Question 2 of 3
An investor purchases 10 May $60 calls for a premium of $0.50 and sells 10 May $55 calls for a premium of $1.50. Which of the following final trading prices would generate a profit?
$55.75
$56.25
$58.50
$61
Question 3 of 3
Which of the following would be considered a qualified distribution from a 529 plan?
Using $25,000 to buy a car so the student can commute to college from home
New Choice