Suppose that, holding yield constant, investors are indifferent as to whether they hold bonds issued by the federal government or bonds issued by state and local governments (that is, they consider the bonds the same with respect to default risk, information costs, and liquidity). Suppose that state governments have issued perpetuities (or consoles) with $82 coupons and that the federal government has also issued perpetuities with $82 coupons. If the state and federal perpetuities both have after-tax yields of 6%, what are their pre-tax yields? (Assume that the relevant federal income tax rate is 33.64%.) The pre-tax yield on the state perpetuity will be 6%. (Round your response to two decimal places.) The pre-tax yield on the federal perpetuity will be %. (Round your response to two decimal places.)

In order to reduce inflation, the Federal reserve may choose to sell Treasury bonds in open market operations. Yes O No

Corporate bonds are riskier than US Treasury, so they pay default risk premium over what Treasury pays to stay competitive in the market.  True  False

please explain

Briefly describe the differences between inflation and Deflation. Briefly describe what Municipal Bonds are as compared to General Obligation Bonds.

These are all types of corporate bonds: Junk, convertible, and period bonds. Convertible, putable, and zero-coupon bonds. Convertible, callable, and municipal bonds. Callable, straight, and private bonds.   The contract, or stated interest rate of a bond is: The rate at which the issuer is paying interest on the bond. The face value of the bond. The interest rate adjusted for the Feds latest prime rate. The interest rate the borrower is willing to accept.   please give me one answer correct answer and explain for both with correct choice

Explain why company managers might choose to issue zero-coupon bonds instead of interest-bearing bonds or coupon bonds instead of zero- coupon bonds? Give pros and cons of each. Be sure to consider the situation from the bond issuer's viewpoint and not the bondholder.

An investor seeking relatively low default risk investments combined with some type of favorable tax treatment and inflation protection should consider which of the following?(1) Insured municipal bonds. (2) TIPS. (3) Zero coupon Treasury bonds. (4) Series I savings bonds. (5) Series HH savings bonds. a. 1, 2 and 3. b. 1, 2 and 4. c. 2 and 4. d. 2, 4 and 5.