A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable bond is 6.16 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond? Multiple Choice O O O O 41.58% 49.88% 33.28% 43.24% 36.61%

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable
bond is 6.16 percent. What is the tax rate that will make an investor indifferent
between the municipal bond and the taxable bond?
Multiple Choice
41.58%
49.88%
33.28%
43.24%
36.61%
Transcribed Image Text:A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable bond is 6.16 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond? Multiple Choice 41.58% 49.88% 33.28% 43.24% 36.61%
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