2. A fixed-interest stock pays coupons of 6% p.a. quarterly in arrears. The loan is redeemed at par on any 31 December between 31 December 2024 and 31 December 2034. An investor who is subject to income tax at 25% and capital gains at 35% buys 10,000 nominal of the stock on 1 January 2018. (a) Calculate the price that the investor should pay for the stock as at 1st January 2018 to get a minimum net yield of 5% per annum convertible quarterly. [6 marks] (b) The investor sells the stock for 11,310.09 on 1st January 2020. How much capital gains tax does the investor pay if during the same tax year the investor also sold another stock for 5,500, which he had bought for 6,450 in 2010. Assume that the investor is able to offset capital losses against capital gains. [4 marks] [Total:10 marks]