5)A married couple from California is in the 31%Federal tax bracket and the 8%California tax bracket.They are considering a 5%Hawaii municipal bond (Federaltax-free), a 5% California bond (doubletax-free)or a 7% corporate bond (fully-taxable). Which bond offers the highest after-tax interest rate?

A California investor is in the 35% Federal tax bracket and the 9% California tax bracket. He has the choice of a 5% Oregon municipal bond (Federaltax-free), a 4% California bond(double tax-free) or a 7% corporate bond(fully-taxable). Which bond offers the highest after-tax interest rate?

Using annual compounding, what price would you predict for a 20-year, 7% bond priced to yield 5%?

Using annual compounding, what price would you predict for a 10-year, 6% bond priced to yield 9%?