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On January 1st Julie Bought a 7-Year,zero Coupon Bond with a Face

Question 7

Multiple Choice

On January 1st Julie bought a 7-year,zero coupon bond with a face value of $1,000 and a yield to maturity of 6%.Assume that Julie's tax rate is 25%.How much tax will Julie have to pay on the bond the first year she owns it?


A) $ 8.55
B) $ 9.00
C) $ 9.48
D) $ 9.98
E) $10.47

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