Week 6 quiz chap 6 & 8 acc 410 - Question 1 3 out of 3...

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Question 1 3 out of 3 points Under existing federal statutes, arbitrage, as it applies to state and local governments is Selected Answer: Legal in some circumstances, but the government may be required to remit arbitrage earnings to the federal government. Correct Answer: Legal in some circumstances, but the government may be required to remit arbitrage earnings to the federal government. Question 2 3 out of 3 points Harbor City issued 6 percent tax-exempt bonds and used the proceeds to acquire federal government securities yielding 7 percent. After paying the interest on the tax-exempt bonds, the city cleared 1 percent. This is an example of Selected Answer: Arbitrag e. Correct Answer: Arbitrag e. Question 3 3 out of 3 points A government has elected to issue new debt and use the proceeds to redeem existing debt because there is an economic gain in doing so. There is, however, an “accounting loss” associated with these events. The accounting loss is defined as Selected Answer: The present value of the principal and interest payments on the new debt less the present value of the principal and interest payments on the old debt. Correct Answer: The present value of the principal and interest payments on the new debt less the present value of the principal and interest payments on the old debt. Question 4 3 out of 3 points
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In which fund type would a government’s debt service fund be found? Selected Answer: Governmental fund type. Correct Answer: Governmental fund type.
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