In February 2002 high-grade corporate bonds sold at a yield of 5.89 percent, while tax-exempts of comparable

Question:

In February 2002 high-grade corporate bonds sold at a yield of 5.89 percent, while tax-exempts of comparable maturity offered 3.99 percent annually. If an investor receives the same after-tax return from corporates and tax-exempts, what is that investor’s marginal rate of tax? What other factors might affect an investor’s choice between the two types of securities?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...