Federal Income Tax Withholdings and Interest Rate Risk
Not what you're looking for?
THE TIME VALUE OF MONEY #1
Some financial advisors recommend you increase the amount of federal income taxes withheld from your paycheck each month so that you will get a larger refund come April 15th. That is, you take home less today but get a bigger lump sum when you get your refund. Based on your knowledge of the time value of money, what do you think of this idea? Explain.
INTEREST RATE RISK #2
Define what is meant by interest rate risk. Assume you are the manager of a $100 million portfolio of corporate bonds and you believe interest rates will fall. What adjustments should you make to your portfolio based on your beliefs?
590 words
Purchase this Solution
Solution Summary
What is meant by risk and recommendations for the increase of FITW (federal income taxes withheld) for a larger refund come April 15th.
Solution Preview
THE TIME VALUE OF MONEY #1
Some financial advisors recommend you increase the amount of federal income taxes withheld from your paycheck each month so that you will get a larger refund come April 15th. That is, you take home less today but get a bigger lump sum when you get your refund. Based on your knowledge of the time value of money, what do you think of this idea? Explain.
Income Taxes:
The recommendation to increase your taxes has to be looked at carefully i.e. your financial situation, credit card debt, student loan debt, and so on. The first step is to look at how much money did you get back on your last tax return? In essence, let's say that in 2010, federal taxes filed in 2009 produced an average refund of over $3600. While it is a great idea to get a big refund around April 15th, many individuals could of divided ...
Purchase this Solution
Free BrainMass Quizzes
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Operations Management
This quiz tests a student's knowledge about Operations Management
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.