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Suppose you want to invest $10,000. You have two options: Option #1: Invest in municipal bonds with an expected return of 13.00%, or Option #2:

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Suppose you want to invest $10,000. You have two options: Option #1: Invest in municipal bonds with an expected return of 13.00%, or Option #2: Invest in the corporate bonds of Jefferson \& Alexander Inc. which are offering an expected return of 17.55% Assume that your decision is based solely on your tax situation. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bond investments? 33.19% 25.93%28.52% 24.11% For your personal portfolio, you purchased 1,000 shares of a foreign manufacturing company for $39.00 per share and sold it for $62.00 per share after 18 months. How will your gain or loss be treated when you file your taxes? As a capital gain that will be taxed at the current ordinary income tax rate As a capital gain that will be taxed at the capital gains tax rate

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