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Sara Nixon is looking for a fixed-income investment. She is considering two bond issues: a. A treasury bond with a yield of 5% b. An
Sara Nixon is looking for a fixed-income investment. She is considering two bond issues:
a. A treasury bond with a yield of 5%
b. An in-state municipal bond with a yield of 4%
Sara is in the 33% federal tax bracket and the 8% state tax bracket. Which bond would provide Sara with the higher tax-adjusted yield?
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