Treasury securities are not exempt from federal taxes but are exempt from state and local income taxes.

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Treasury securities are not exempt from federal taxes but are exempt from state and local income taxes. Thus, the after-tax yield on a Treasury security is calculated as:

ra = rb(1 − tf)

where tf = the marginal federal tax rate. LO.1

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Financial Markets And Institutions

ISBN: 9781259919718

7th Edition

Authors: Anthony Saunders, Marcia Cornett

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Question Posted: Jul 25, 2024 06:06 AM

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Treasury securities are not exempt from federal taxes but are exempt from state and local income taxes.

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Financial Markets And Institutions

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