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Dana intends to invest $ 7 6 , 0 0 0 in either a Treasury bond or a corporate bond. The Treasury bond yields 5
Dana intends to invest $ in either a Treasury bond or a corporate bond. The Treasury bond yields percent before tax, and the corporate bond yields percent before tax. Assume Dana's federal marginal rate is percent and she itemizes deductions.
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a Assuming Dana's marginal state rate is percent, which of the two options should she choose?
o How much interest aftertax would Dana earn by investing in the corporate bond?
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b If she were to move to another state where her marginal state rate would be percent, which of the two options should she choose?
b How much interest aftertax would Dana earn by investing in the corporate bond as per requirement b
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