Government of canada bond

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Reference no: EM133205325

A Government of Canada Bond with five years to maturity paying a semi-annual coupon of 6.5%, is currently yielding 7%. How much money should an investor pay for this bond? Assume the face value is $1,000 and ignore transaction costs.

An investor's marginal tax rate is 47% (total of federal, provincial and surtax) for ordinary income. For the Government of Canada Bond in part c), how much tax would the investor have to pay in year 5?

Reference no: EM133205325

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