1. An investor in the? 25% marginal tax bracket purchased a bond for? $983, received? $85 in? interest, and then sold the bond for? $955 after holding it for six months. The tax rate for capital gains with holding periods in excess of one year is? 15%. What are the pre−tax and post−tax holding period? returns?

A. ?6.0%; 4.5%

B. ?5.8%; 4.5%

C. ?6.0%; 4.3%

D. ?5.8%; 4.3%

2. A bond matures in 30? years, has a 20 year duration and a yield to maturity of? 9.32%. The market interest rate has increased by? 0.47%. The modified duration is

A. 27.44 years.

B. 14.1 years.

C.18.29 years.

D. 9.4 years.