In non-registered accounts,investors in high marginal tax brackets will normally prefer mutual funds that generate

Question

Quizplus · Accepted Answer

Investors in high marginal tax brackets will prefer mutual funds that generate long-term capital gains because these gains are taxed at a lower rate than ordinary income or short-term capital gains. This is because long-term capital gains tax rates are capped at 20%, while ordinary income tax rates can go as high as 37%. Therefore, long-term capital gains can provide a tax advantage for investors in high tax brackets, making option B the best choice.

In Non-Registered Accounts,investors in High Marginal Tax Brackets Will Normally