respond to 4 classmates discussion 2

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Respond to 4 classmates discussion post.

Here is what they had to answer: There are unique tax liabilities for investor income derived from bonds and other fixed-income instruments, which affect overall holding period returns realized from these investments. In addition, there are varying levels of risk associated with holding these types of securities.

Select two types of bonds and compare the following between the two types selected:

  • What are the comparative levels of investment returns for each? View:
  • What are the relevant tax considerations applicable to the investment returns on each?
  • What are the comparative risk considerations between the two?



I have never used Piktochart, please review my attach infographic. News surrounds us daily. The nightly news targets men and women, ages 50 plus. You can tell this from the advertisements aired. We see drug companies trying to promote medications for high blood pressure or diabetes. On the other side, we see food commercials. The nightly news does air during dinner times. These food commercials are for fast food, sit down restaurants, or quick dinners to fix. Personally, I do not own a television. If I want to watch something, I watch Netflix or Amazon. Advertising can be important in my professional career. Since I work in Human Resources, recruiting is required. In order to find new employees, you must let people know you are looking. The company that I work for uses LinkedIn, Angel List, Indeed, and Glassdoor. It is important to let job searchers know you are hiring, and these are some great ways to reach out to future employees.

I wish everyone the best of luck!


Before reading this module’s activity I have never heard of a conceptual map or infographic. I have to say that I am not the most proud of the image I attempted to create. For one, I had no idea what I was doing because again, I’ve never heard of a conceptual map or infographic and 2 the online templates most were not free and required some type of subscription which I cannot afford at the moment. What I was going for with the infographic I created was how in today’s society pop culture doesn’t stand alone without social media. Social media nowadays tends to have the inside scoop on scandal, the latest trends, and etc. far before a news source like CNN or The New York Times does. In 2018 the term “viral” has literally made and broken careers if we look at the success of Hip Hop star Cardi B, her fame rose when she used to make instagram videos, she then went on the TV “Love and Hip Hop” and is now a international rap star. She can be seen in the news sometimes due to her antics (alleged assualts,etc.) but usually social media has the information far before a newspaper or news show does. My infographic is below.



The first bond for comparison is a U.S. Treasury bond.

The minimum investment to purchase a treasury bond is $100.

The treasury bond pays a fixed rate every 6 months until it matures in 30 years,

A bond issued on 10/25/2018 will mature in 10/25/2048 with an interest rate of 3.00%.

This bond pays $3 every year or $1.50 every 6 months.

The interest income is exempt from state and local taxes but is subject to federal income taxes.

According to Arthur Keown of Personal Finance: Turning Money into Wealth, “these securities are usually viewed as risk-free, given the government’s ability to tax and print more money” (Keown, 2016, pg. 437).

The second type of bond is a municipal bond issued by the state of North Carolina.

North Carolina Capital Facilities Finance Refunding Duke University Project Series B.

The price set for the bond is $102.181. It matures on 10/1/2039.

The bond’s coupon rate is 4.000% meaning it pays $4.09 a year or $2.05 every 6 months.

Arthur Keown states “that they are tax-exempt—interest payments aren’t taxed by the federal government or in general, or by the state as long as you live in the state that the bond was issued” (Keown, 2016, pg. 439).

“Although municipal bonds are issued by the government they are not risk-free. In fact, there have been several cases where local governments have failed to pay on municipal bonds” (Keown, 2016 pg. 439).

I think that I would consider both bonds for diversification. For some reason the fact that the North Carolina Municipal bond has a mature date so far in the future I feel that I would receive a guaranteed return. Of course, this may be wishful thinking.


Treasury bonds have a 30-year term and are government securities. With these bonds there are able to earn interest until they mature. The owner of the bond is also paid a principle when the bond matures. These bonds pay a fixed interest rate on a semi-annual basis but the interest is exempt from local and state taxes, with that being said it’s not exempt to federal income tax. They are credit-risk free.

– No value loss
– Guaranteed rate of return
– Tax exempt from local and state tax
– Better for retirement (can offer a steady income through interest payments)
– Lower interest payments

– Restrictions & penalties
– Tax liability
– Buying limits
– Long term investment

Municipal Bonds are usually used to raise money for capital investment for things like schools, bridges, hospitals, and more. “Municipal bonds bear interest which is paid at either a fixed or variable rate, depending on the terms of the bond. The issuer of the bod receives a cash payment from the investor in return for agreeing to pay the scheduled rate of interest to the bond holder. Interest is paid over an agreed upon period of time that varies from a few months to 20, 30, or even 40 years and sometimes longer. Once the bond matures, the investor is reimbursed the face value of the bond. (Pat S., 2018)”

– Free from state, local and federal taxes
– Fixed income assets
– High level of liquidity
– Tax advantaged compound growth

– Opportunity cost
– Bond yields might not beat inflation (Due to municipal bonds offering tax advantages their yields are usually low, which makes them less likely to beat inflation.)
– Interest rate risk
– Risk of default

– Risk of loss of capital

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