Question: Question 5 (10 points) Suppose that the yield to maturity of the 4% coupon, 30-year maturity bond falls to 7% by the end of the

 Question 5 (10 points) Suppose that the yield to maturity of

Question 5 (10 points) Suppose that the yield to maturity of the 4% coupon, 30-year maturity bond falls to 7% by the end of the first year and that the investor sells the bond after the first year. If the investor's federal plus state tax rate on interest income is 25% and the combined tax rate on capital gains is 30%, what is the investor's after- tax rate of return

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