You are considering buying a government bond that is not taxed. It has an annual coupon rate of 4%, will cost $957, has a term of 5 years, and inflation is 3%. A 5 year corporate bond with a coupon rate of 6% costs $980, with a call penalty of $99. Your client is in the 39.6% Federal Tax Bracket and does not pay state taxes. Calculate the taxable equivalent yield for the government bond and compare it to the yield of maturity and yield to call of the corporate bond if it is called in 3 years. Which bond should your client buy and why? Show all of your work