PART III: Multi-Part Short Answer. Use the information below to answer the following questions. Write your answers in the space provided. PARTA (6 marks) Alice received $35 twice a year in interest from her bond for which she paid $800 and which matured at $1,000. She held the bond for 6 years and had the option to reinvest the semi- annual income at 5% annually. Her salary is $66,000 a year. Her marginal tax rate is 35%. The tax rate on dividend income is 25%. 1. What is her EAR before-tax if she does not reinvest the interest income? (2 marks) 2. What is her EAR after-tax if she does not reinvest the interest income? (2 marks) 3. If Alice decides to reinvest her interest income, will her EAR after tax be greater if taxes are paid semi-annually or annually? Explain. HINT: No calculations are required for this question. (2 marks)