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    Money Banking and Financial Markets Study Set 2
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    Exam 7: The Risk and Term Structure of Interest Rates
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    Suppose the Tax Rate Is 25% and the Taxable Bond
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Suppose the Tax Rate Is 25% and the Taxable Bond

Question 87

Question 87

Multiple Choice

Suppose the tax rate is 25% and the taxable bond yield is 8%. What is the tax-exempt bond yield?


A) 2%
B) 2.3%
C) 6%
D) 6.9%

Correct Answer:

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