A municipal bond has a YTM of 5.19 percent while the YTM of a comparable taxable bond is 7.78 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond? Multiple Choice4 3.65% 34.54% 45.37 % 52.76 % 37.99%

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2. Which statement is not correct? a) Municipal bonds tend to have a lower yield than Treasuries b) Municipal bonds tend to have a lower rating than Treasuries c) Municipal bonds are "risk free" securities d) Municipal bonds are an interesting investment from a tax perspective

3. A pension fund has the following liability obligations to its pensioners: Market Value $4.25 Bln $5.75 Bln $3.50 Bln Liability A B C It has $13.50 Bln available cash to invest in the following bonds: Bond Ꭰ E Modified Duration Modified Duration 5.25 11.86 6.25 8.05 7.55 Set up the system of equations to determine how much of its available cash should the pension fund invest in the two bonds to ensure that the market value duration of assets will match the market value duration of liabilities.

Which of the following statement is true?  Interest rates on Municipal bonds are on average   Question 24 options:   lower than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as liquid as the U.S. government bonds .   higher than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as risky as the U.S. government bonds .   lower than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as risky as the U.S. government bonds .   lower than those of the U.S. government bonds with the same terms to maturity because many local business prefers municipal bonds.   higher than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as liquid as the U.S. government bonds .

4. Chapter MC, Section .03, Problem 106 A 7-year municipal bond yields 4.80%. Your marginal tax rate (including state and federal taxes) is 32.00%. What interest rate on a 7-year corporate bond of equal risk would provide you with the same after-tax return? (Round your final answer to two decimal places.) Oa. 7.06% Ob. 3.64% OC. 6.34% d. 3.26% e. 15.00% Save & Continue Continue without saving

Ef 505.

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Which of the following statements about are true about municipal bonds? (Select all that apply: 3 of the answers below are correct.) O Municipal bonds are typically backed by a pool of residential mortgages O Intrest payments dy municipal bonds are exempt from federal income täxes and most state & local income taxes O Municipal bonds can typically be exchanged for sstock in the underlying issuer at the discretion of the bond holder. O A municipal bond sold to finance a specific revenue-generting project and backed by cash flows from that project are called "Revenue Bonds". O A municipal bond backed by the full faith & credit of the issuer is called a "General Obligtion Bond". O There is NO secondary market for municipal bonds. O municipal bonds are generally considered to be low risk because they are insured by the FDIC

If a bond is backed by the revenue generated from a project, it is called______ Group of answer choices GO bond Revenue bond Green bond tax-supported bond