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Business, 19.12.2019 03:31 amuijakobp78deg

Suppose that your marginal federal income tax rate is 30%, the sum of your marginal state and local tax rates is 5%, and the yield on thirty-year u. s. treasury bonds is 10%. you would be indifferent between buying a thirty-year treasury bond and buying a thirty-year municipal bond issued within your state (ignoring differences in liquidity, risk, and costs of information) if the municipal bond has a yield ofa) 6.5%.
b) 7.0%.
c) 9.5%.
d) 10.0%.

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