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Fergie has the choice between investing in a State of New York bond at 5 percent and a Surething bond at 8 percent. Assuming that

Fergie has the choice between investing in a State of New York bond at 5 percent and a Surething bond at 8 percent. Assuming that both bonds have the same nontax characteristics and that Fergie has a 30 percent marginal tax rate, what interest rate does the state of New York bond need to offer to make Fergie indifferent between investing in the two bonds?

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