question 4: 4. Suppose a 10-yr municipal bond currently offer the yield of 4%. What is...

Question

Question

question 4:
4. Suppose a 10-yr municipal bond currently offer the yield of 4%. What is the equivalent taxable yield if your tax bracket i

Answer 1

Answer #1

Equivalent taxable yield = Yield on Municipal Bond/(1-Tax rate)

= 4%/(1-12%)

= 4.5455%

i.e. 4.55%

Answer 2

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