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1. Suppose a taxable bond pays 5% yield and a municipal security pays 3% yield. At what tax rate would you be indifferent between the

1. Suppose a taxable bond pays 5% yield and a municipal security pays 3% yield. At what tax rate would you be indifferent between the two bonds?

2. Suppose a 10-year 5% coupon bond currently sells for $1,100.

A.) If it pays annual coupons, what is the YTM?

B.) If it pays semiannual coupons, what is the YTM?

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