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A 4.40 percent coupon municipal bond has 10 years left to maturity and has a price quote of 97.95. The bond can be called in
A 4.40 percent coupon municipal bond has 10 years left to maturity and has a price quote of 97.95. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.)
Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket).
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