Scenario: Congress will soon pass a tax reform act that will reduce individual tax rates. Use the Lenders'-Borrowers' curve apparatus, or other appropriate tools, to analyze the impact this tax cut would have on the municiple bond market.

Q. As an advisor indicate how this policy would affect investors with tax exempt bonds for the long term and how to advise a client who wants to take a speculative position that would make quick short term profit if this change occurred (but would lose money if the change does not occur) . What position would you advise them to take?