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You can invest in taxable bonds that are paying a yield of 1 2 . 1 percent or a municipal bond paying a yield of
You can invest in taxable bonds that are paying a yield of percent or a municipal bond paying a yield of percent. Assume your
marginal tax rate is percent.
a Calculate the aftertax rate of return on the taxable bond?
Note: Round your percentage answer to decimal places eg
b Which security bond should you buy?
a Rate of return
b The security bond one should buy is:
Taxable bonds
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