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Suppose your marginal tax rate is 30%. a. What is your after-tax return from holding (to maturity) a one-year corporate bond with a yield to
Suppose your marginal tax rate is 30%. a. What is your after-tax return from holding (to maturity) a one-year corporate bond with a yield to maturity of 10%? b. What is your after-tax return from holding (to maturity) a one-year municipal bond with a yield to maturity of 8%? c. If both of these bonds have the same degree of risk and liquidity, which one would you prefer to own? Why?
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