Which of the following statements regarding implicit taxes and clienteles is not true?
A) The reduced return of tax- favored assets is an implicit tax.
B) Marginal investors will always benefit from the implicit tax on tax- favored investments.
C) Market forces drive down the BTROR of tax- favored assets.
D) Investors whose tax rate exceeds that of the marginal investor can reap some benefit through the clientele effect.
Correct Answer:
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