Reference no: EM133003397

Questions -

Q1. Margaret purchased property in 1995 that was comprised of a building and land. The total purchase price was $150,000 where $60,000 was allocated to the land and $90,000 to the building. Margaret sold the property this year for $330,000. At the time of sale, a valuation confirmed that the land represented the same proportion of the total value as when the property was originally purchased. During the time that Margaret owned the property, she claimed $20,000 in capital cost allowance. What is the tax consequence associated with Margaret's disposition of the property?

A) A capital gain of $128,000 only

B) A capital gain of $160,000 only

C) A taxable capital gain of $90,000 only

D) Taxable income of $110,000 only

Q2. Rani would like to purchase preferred shares of MyMusic Inm., which have a $500 par value and a dividend rate of 9.9%. If the share's current market price is $755, what is the current yield?

A) 4.60%

B) 5.95%

C) 6.09%

D) 9.20%

Q3. With regard to the use of maturity dates as a basis of diversification for an investment portfolio comprised of bonds, which one of the following statements is true?

A) Bonds with different maturity dates are always highly correlated, which is important to portfolio diversification

B) Bonds with the same maturity date to be highly correlated.

C) Maturity date is not a basis upon which portfolio diversification should be based.

D) The development of a portfolio comprised of bonds that all have the same term to maturity will neutralize the risk associated with a change in market interest rates.