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Question 7 You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,050. What is the rate of return

Question 7

You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,050.

What is the rate of return on your investment if the bond pays interest annually?

If your marginal tax rate is 35%, and 50% of capital gains are taxable, what is the after-tax rate of return on your bond investment?

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