PWM - Individual Flashcards
1
Q
Annual Wealth Tax
A
After-tax FV = ( {1 + r} x {1 - wealth tax} ) ^n
applies to total value
2
Q
When is tax drag minimized?
A
at moderate time horizons and returns
3
Q
Annualized Equivalent Return
A
= {(FV after tax / initial value) ^ (1/n)} - 1
= annualized single after-tax rate of return that if compounded would produce the same after-tax FV as considering all tax values
4
Q
Accrual Equivalent Tax Rate (T(ae))
A
= 1 - (Annualized Equiv Return / return)
5
Q
FV with annual tax on gains
A
FV = {1 + r (1 - t) } ^ n
6
Q
FV with tax-deferred
A
FV = {(1 + r)^n} x (1 - t)
7
Q
FV with deferred capital gains tax
A
FV = {(1 + r)^n} x (1 - t) + tB
8
Q
FV tax-exempt
A
FV = (1 + r) ^ n
9
Q
after-tax risk
A
= SD x (1 - t)
