At the Beginning of the Year,you Purchased a 5-Year Zero

question 14

Multiple Choice

At the beginning of the year,you purchased a 5-year zero coupon bond with a yield to maturity of 5.00% and a face value of $1,000.Your tax rate is 30.00%.What is the total tax that you will have to pay on the bond during the first year? Do not round your intermediate calculations.

• A) $14.34
• B) $11.87
• C) $11.75
• D) $10.23
• E) $10.70

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