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Q4: An investor can invest either in 7% general obligation bond or in 11% mortgage backed security. Which asset is more attractive for investor if

Q4: An investor can invest either in 7% general obligation bond or in 11% mortgage backed security. Which asset is more attractive for investor if she is in the 34% federal tax bracket? Why?

Q5: If average corporate bond and tax-exempt municipal bond rates were 8.33% and 6.25% respectively, at what marginal tax rate would an investor be indifferent between the two? Why?

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