An investor buys a U.S. Treasury bond whose current yield to maturity as reported in the daily newspaper is 10 percent. The investor is subject to a 33 percent federal income tax rate on any new income received. His real after-tax return from this bond is 2 percent. What is the expected inflation rate in the financial marketplace?

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The Answer of An investor buys a U.S. Treasury bond whose current yield to maturity as reported in the daily newspaper is 10 percent. The investor is subject to a 33 percent federal income tax rate on any new income received. His real after-tax return from this bond is 2 percent. What is the expected inflation rate in the financial marketplace?

An Investor Buys a U