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You earned 9% percent on your corporate bond portfolio this year and you are in a 18 percent federal tax bracket. If over your holding period, inflation was 4 percent, your real after-tax rate of return was?

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Solution Summary

In this solution, we calculate what an individual's real after-tax rate of return is on a corporate bond portfolio.

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Suppose the bond has par value $100. By the end of the year, you should have earned $9 ...

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