As a Muni owner you expect to earn 4.20% and your 5 years Muni is rated BBB. What is the tax equivalent rate for this bond? Would you buy a corporate bond instead? Why or why not? Tax rate is 30%.

TBill 1 year 1.0% YTM

TBond 5 year 2.5% YTM

TBond 10 year 3.0% YTM

AAA 20bp

AA 40bp

TIP 1 year .20%

TIP 5 year .50%

TIP 10 year 1.0%

A 70bp

BBB 125bp