Question: give Q23 correct answer in 10 mins i will give thumb up A municipal discount bond is promising to pay $2,150 next year. It is

 give Q23 correct answer in 10 mins i will give thumb

give Q23 correct answer in 10 mins i will give thumb up

A municipal discount bond is promising to pay $2,150 next year. It is selling for $2,000 today. A treasury bond also promises to pay $2,150 next year, after tax. If the average income tax rate faced by bond market investors in 25 percent, due to arbitrage, the interest rate on the Treasury bond will be X percent and its price will equal Y dollars, where: X=10 percent &Y=$2,000 X=12 percent &Y=$2,000 X=12 percent &Y=$2,200 X=10 percent &Y=$2,200

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