An investor's tax rate is 30 percent. The quoted yield on a municipal bond which is a tax exempt security is 6.00%. What will his yield be after he pays his taxes?

options:

A)

1.80%

B)

4.20%

C)

6.00%

D)

8.57%

E)

20.00%

The trustee of a trust for the benefit of a wealthy playboy in the 35 percent tax bracket is aware of a tax-exempt security that is paying a quoted yield of 7 percent. To match this yield, taxable securities must offer a before-tax yield of

options:

	a. 7.00 percent.
	b. 10.80 percent.
	c. 20.00 percent.
	d. none of the above