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Assume you are in a 15% marginal tax bracket. This means that every additional dollar of income you earn will be taxed at 15%. You

Assume you are in a 15% marginal tax bracket. This means that every additional dollar of income you earn will be taxed at 15%. You are considering a $5,000 investment in a tax-exempt CA municipal bond with a 2.4% yield.

Use the taxable equivalent yield formula to determine the rate a taxable investment would have to pay to be equivalent to the Muni.

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