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Problem 2 (3 marks) Suppose a municipal bond offers a yield to maturity of 6% and a same maturity corporate bond offers an 8.5% yield.

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Problem 2 (3 marks) Suppose a municipal bond offers a yield to maturity of 6% and a same maturity corporate bond offers an 8.5% yield. For which values of the marginal tax rate an investor would prefer to buy the corporate bond

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