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Assume you are in the 15 percent tax bracket. What tax-exempt return would a municipal bond need to pay to have a taxable equivalent yield

Assume you are in the 15 percent tax bracket. What tax-exempt return would a municipal bond need to pay to have a taxable equivalent yield of 5.00%. Calculate the tax-exempt return using the formula: Taxable equivalent yield = Tax-exempt return / (1.0 Your tax rate)

4.50%

4.25%

3.75%

5.10%

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