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If a Fully-Taxable Bond Yields a BTROR of 10% (Rb

Question 22

Multiple Choice

If a fully-taxable bond yields a BTROR of 10% (Rb = 10%) and a tax-exempt bond of similar risk earns a BTROR of 7.5% (Rf = 7.5%) ,then the implicit tax rate is


A) 25%.
B) 75%.
C) 10%.
D) none of the above.

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