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There are two investments. Bond X is a AAA rated corporate bond with a YTM of 5% per year. Bond B is a AAA rated
There are two investments. Bond X is a AAA rated corporate bond with a YTM of 5% per year. Bond B is a AAA rated municipal bond with a YTM of 3.5% per year. What is the critical tax rate that makes the two investments equivalent? If my marginal tax rate is 25%, which bond should I buy?
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