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Suppose that five-year AAA-rated municipal bonds were yielding 2.88% whereas five-year AAA-rated corporate bonds were yielding 4.23%. Municipal bonds are typically tax-exempt at the federal
Suppose that five-year AAA-rated municipal bonds were yielding 2.88% whereas five-year AAA-rated corporate bonds were yielding 4.23%. Municipal bonds are typically tax-exempt at the federal level, whereas corporate bonds are fully taxable. The lower pre-tax return on municipal bonds is called: A. An explicit tax B. An implicit tax C. An outrageous tax D. An egregious tax E. An estate tax
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