APMA Mod 3 Question and answers
verified to pass 2025/2026
One type of bond that is subject to the alternative minimum tax (AMT) is a
A)
Treasury bond.
B)
private activity bond.
C)
general obligation bond.
D)
GMNA bond. - correct answer ✔B)
private activity bond.
A private activity bond is a municipal bond, the interest from which is not includable in regular taxable
income, but is includable when calculating AMT.
Eurodollar bonds are securities sold
A)
outside of the United States, denominated in the foreign currency, and underwritten by U.S. syndicates.
B)
by European companies in the United States.
, C)
outside of the United States, denominated in dollars, and underwritten by U.S. syndicates.
D)
outside of the United States, denominated in dollars, and underwritten by non-U.S. syndicates. - correct
answer ✔D)
outside of the United States, denominated in dollars, and underwritten by non-U.S. syndicates.
Bonds and preferred stock exhibit all of the following similarities except
A)
multiple issues of the security.
B)
fixed periodic cash flows.
C)
accounting treatment.
D)
conversion features. - correct answer ✔C)
accounting treatment.
Bonds and preferred stock differ in accounting treatment. Interest expense is deductible, while
preferred dividends are not deductible. Additionally, on the balance sheet, bonds are liabilities and
preferred stock is equity.
verified to pass 2025/2026
One type of bond that is subject to the alternative minimum tax (AMT) is a
A)
Treasury bond.
B)
private activity bond.
C)
general obligation bond.
D)
GMNA bond. - correct answer ✔B)
private activity bond.
A private activity bond is a municipal bond, the interest from which is not includable in regular taxable
income, but is includable when calculating AMT.
Eurodollar bonds are securities sold
A)
outside of the United States, denominated in the foreign currency, and underwritten by U.S. syndicates.
B)
by European companies in the United States.
, C)
outside of the United States, denominated in dollars, and underwritten by U.S. syndicates.
D)
outside of the United States, denominated in dollars, and underwritten by non-U.S. syndicates. - correct
answer ✔D)
outside of the United States, denominated in dollars, and underwritten by non-U.S. syndicates.
Bonds and preferred stock exhibit all of the following similarities except
A)
multiple issues of the security.
B)
fixed periodic cash flows.
C)
accounting treatment.
D)
conversion features. - correct answer ✔C)
accounting treatment.
Bonds and preferred stock differ in accounting treatment. Interest expense is deductible, while
preferred dividends are not deductible. Additionally, on the balance sheet, bonds are liabilities and
preferred stock is equity.
