QUESTION 51

1. Which of the following bonds are least subject to reinvestment rate risk?

   		a. 10-year Treasury notes paying 6%.
   		b. 20-year corporate bonds rated AAA paying 8%.
   		c. 30-year zero coupon hi-yield bonds yielding 10%.
   		d. Municipal bonds with 5 years to maturity paying 4%.
   		e. 20-year callable corporate bonds paying 8.5%.

QUESTION 52

1. Eugene is single and in the 32% federal and 3% state tax brackets. He is considering the purchase of a municipal bond, issued in a state other than his state of residence, with a YTM of 7%. What is Eugene's tax equivalent yield on the bond?

   		a. 4.55%.
   		b. 4.76%.
   		c. 10.29%.
   		d. 10.77%.