Multiple Choice
Holding liquidity and default risk constant, an investor earning 6% from a tax-exempt bond who is in a 25% tax bracket would be indifferent between that bond and a taxable bond with a(n) :
A) 8% yield.
B) 4.5% yield.
C) 6.25% yield.
D) 7.5% yield.
Correct Answer:
Verified
Correct Answer:
Verified
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