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The Real Rate of Return on a Tax-Free Investment Yielding

Question 15

Multiple Choice

The real rate of return on a tax-free investment yielding 7 percent annually would be ____ percent if the investor were in the 35 percent marginal tax bracket and inflation were 4 percent.


A) -0.55 percent
B) 0.55 percent
C) 3.00 percent
D) 4.48 percent

Correct Answer:

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