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| Teaching Since: | May 2017 |
| Last Sign in: | 409 Weeks Ago |
| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Betty Forrester is 55 years old, wants to diversify her investment portfolio, and must decide if she should invest in tax-free municipal bonds or corporate bonds. The tax-free bonds are highly rated and pay 4.25 percent. The corporate bonds are more speculative and pay 6.1 percent.
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a. If Betty is in the 33 percent tax bracket, what is the taxable equivalent yield for the municipal bond?
b. If you were Betty, would you choose the municipal bonds or corporate bonds? Justify your answer.
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