Question
. A municipal bond selling at par has a yield-to-maturity equal to 10%. A bank investment manager wishes to calculate its tax equivalent yield. Assume
. A municipal bond selling at par has a yield-to-maturity equal to 10%. A bank investment manager wishes to calculate its tax equivalent yield. Assume that it is a qualified bond, the bank's tax rate is 34%, and the average cost of funds for the bank is 8%. What is the answer if the bond is not qualified?
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The Changing Geography Of Banking And Finance
Authors: Pietro Alessandrini ,Michele Fratianni ,Alberto Zazzaro
1st Edition
1441947205, 978-1441947208
