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You Just Purchased a 12-Year,$1,000 Face Value,zero Coupon Bond with a Yield

Question 16

Multiple Choice

You just purchased a 12-year,$1,000 face value,zero coupon bond with a yield to maturity of 9%.If your tax rate is 25%,how much in taxes will you have to pay at the end of the first year of holding the bond?


A) $6.86
B) $7.22
C) $7.60
D) $8.00
E) $8.40

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