If the yield on a 10year Treasury note is 3.5 percent and the marginal tax rate facing
Question:
If the yield on a 10‐year Treasury note is 3.5 percent and the marginal tax rate facing an investor is 30 percent, what is the expected yield on a muni of that maturity if that security has the same liquidity and credit risk features of the Treasury?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (3 reviews)
The yield on a municipal bond also known as a muni thats equivalent to a Treasury note considering a ...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
4.00+
2+ Reviews
10+ Question Solved
Related Book For
Financial Markets Banking And Monetary Policy
ISBN: 9781118872239
1st Edition
Authors: Thomas D. Simpson
Question Posted:
Students also viewed these Business questions
-
11. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the...
-
1. The return on a 30 -year Treasury Bond is 8%. A similar 30 -yr corporate bond has a total return of 11% and has a liquidity risk premium of 0.6%. What is the default risk premium of the corporate...
-
What is the consideration to invest in the company which has recorded revenue growth over the past 5 years but the Debt to Equity ratio also increase significantly to 5.72?
-
Identify each of the following items as revenues, expenses, or withdrawals from the drop down provided. 1. Advertising expense 2. Consulting revenue 3. Rent expense 4. Rental income 5. Wages expense...
-
An 85-N box of oranges is being pushed across a horizontal floor. As it moves, it is slowing at a constant rate of 0.90 m/s each second. The push force has a horizontal component of 20 N and a...
-
A pressure cooker (closed tank) contains water at 100C with the liquid volume being 1/10 of the vapor volume. It is heated until the pressure reaches 2.0 MPa. Find the final temperature. Has the...
-
Mean and dispersion A random sample of 12 days' quality control data from a 6-month population reveals the following frequencies of defective condensers: Defective Defective Day Units Day Units...
-
Presented below are the purchases and cash payments journals for Fornelli Co. for its first month of operations. In addition, the following transactions have not been journalized for July. The cost...
-
You borrowed money $ 40,000 from Alliance Federal. The interest rate was 2.9% for 10 with monthly payments. You have been making payments for two years. What is the value of this loan today? You want...
-
Kim Yi has prepared the following list of statements about accounts. 1. An account is an accounting record of either a specific asset or a specific liability. 2. An account shows only increases, not...
-
Using the FRED database, plot the nominal yield on a 30year Treasury bond and the yield on a 30year TIPS bond. Do they move together? Next plot inflation compensation on the 30year bond. Can you spot...
-
Why would a muni issuer want to place a serial issue of bonds rather than a single maturity? A callable rather than call-protected bond?
-
At a pressure of 760 torr, formic acid (HCO 2 H; boiling point = 100.7 C) and water (H 2 O; boiling point = 100.0 C) form an azeotropic mixture, boiling at 107.1 C, that is 77.5% by mass formic acid....
-
George owns 100% of equity of a company. . If George works 6 hours per day, the company's EBIT will be 335,000 dollars per year, in perpetuity. If, instead, he works 12 hours per day, the firm's EBIT...
-
Hendrick Hospital keeps paper records for ten years. They have gotten behind on the destruction of medical records. Their HIM director has sent down a memo that it was time to start purging some...
-
Willie Wilson plans to borrow $ 3 5 , 5 9 1 at the beginning of each of his 5 years of college. He will repay the loan in 1 0 equal annual installments at the end of each year starting one year after...
-
A woman was born in 1960. Her primary insurance amount is $1,950. How much will her Social Security monthly benefit be if she takes it when she is age 62?
-
In the beginning of October, an investor has a stock portfolio worth $3,460,000. The content of the portfolio replicates very closely that of the Shanghai SE A share index. The investor wants to...
-
Refer to the Smith Valley Snow Park Lodge expansion project in Short Exercise S26- 4 and your calculations in Short Exercises S26- 5 and S26- 6. Assume the expansion has zero residual value. Data...
-
Why is inventory management important for merchandising and manufacturing firms and what are the main tradeoffs for firms in managing their inventory?
-
Suppose that after a few mergers and acquisitions, only one bank holds 70% of all deposits in the United States. Would you say that this bank would be considered too big to fail? What does this tell...
-
Would you recommend the adoption of a system of deposit insurance, like the FDIC in the United States, in a country with weak institutions, prevalent corruption, and ineffective regulation of the...
-
Suppose that you have $300,000 in deposits at a bank. After careful consideration, the FDIC decides that this bank is now insolvent. Which method would you like to see the FDIC apply? What if your...
-
ABC Corporation's balance sheet on December 31, 2023, is as follows: Item Amount ($) Accounts Payable 1,660,000 Notes Payable 1,640,000 Accrued Expenses 1,520,000 Total Current Liabilities ?...
-
Transfer Pricing at Intel Intel is determining its transfer pricing policy. Values: Item Amount Production Cost $70 per unit Profit Margin 25% Requirements: Determine the minimum transfer price....
-
Calculate the expected costs when production is 5 , 4 0 0 units. ( Round per unit calculations to 2 decimal places, e . g . 1 5 . 2 6 and final answer to the nearest whole dollar, e . g . 5 , 2 7 5 ....
Study smarter with the SolutionInn App