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. a) A bond pays 7% and it is taxable. How much will another bond of the same risk, which has no tax liability, pay

. a) A bond pays 7% and it is taxable. How much will another bond of the same risk, which has no tax liability, pay equivalently?

b )

What are the yield to maturity and the yield to call of a 20 year, 6% bond that is selling for $1050 has a call value of $1200 in year 3? Which will the investor make?

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