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Suppose taxable bonds are currently yielding 7 percent, while at the same time, munis of comparable risk and maturity are yielding 5 percent. Which is

Suppose taxable bonds are currently yielding 7 percent, while at the same time, munis of comparable risk and maturity are yielding 5 percent. Which is more attractive to an investor in a 30 percent bracket? What is the break-even tax rate? How do you interpret this rate?

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