A$.$ On January $1,2021,$ you purchase a $7-$year $$1,000$ par value bond, with an $10\%$ coupon, and a yield of $16\%.$ Assume that interest rates increase by $100$ basis points each year and that the bond is sold on January $1,2025.$ Calculate the realized horizon yield. Interest is paid annually.

B$.$ Consider the following:

An $8\mathrm{.}4\%$ coupon bond issued by the state of Indiana selling for $$1,000$ and

A $9\mathrm{.}88\%$ coupon corporate bond selling for $$1,000.$

What marginal tax rate would an investor need be in to be indifferent between these two bonds?

C$.$ How would you use a zero$-$coupon bond to immunize a bond portfolio? Discuss why a zero$-$coupon bond is an ideal instrument in this regard.