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Suppose that five-year AAA-rated municipal bonds were yielding2.88% whereas five-year AAA-rated corporate bonds were yielding4.23%. Municipal bonds are typically tax-exempt at the federallevel, whereas corporate
Suppose that five-year AAA-rated municipal bonds were yielding2.88% whereas five-year AAA-rated corporate bonds were yielding4.23%. Municipal bonds are typically tax-exempt at the federallevel, whereas corporate bonds are fully taxable. The lower pre-taxreturn 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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