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    Exam 5: The Risk Structure and Term Structure of Interest Rates
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    Which Bond Would Someone in a 35% Tax Bracket Choose
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Which Bond Would Someone in a 35% Tax Bracket Choose

Question 73

Question 73

Essay

Which bond would someone in a 35% tax bracket choose to buy: a municipal bond with an interest rate of 7% or a corporate bond with an interest rate of 10%?

Correct Answer:

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The corporate bond returns 6.5...

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