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An individual buys $100,000 in financial assets and holds them for 2 years. The financial assets earn 12% interest each year. The tax rate is

An individual buys $100,000 in financial assets and holds them for 2 years. The financial assets earn 12% interest each year. The tax rate is 25%.

Consider a tax system in which half of realized and unrealized capital gains are taxed. What is the annual net (of taxes) rate of return on these assets?

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