Question
Holding liquidity and default risk constant, what is the interest rate that would make an investor indifferent between a tax-exempt bond and another bond giving
Holding liquidity and default risk constant, what is the interest rate that would make an investor indifferent between a tax-exempt bond and another bond giving that the investor earning 7% from a tax-exempt bond and is in a 20% tax bracket. (Show all the calculation steps and round your answer to 4 digits)
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
7th Edition
0324171730, 978-0324171730
