An investor lives in a state with a 4?% income tax rate. Her federal income tax bracket is 35?%. She wants to invest in one of two bonds that are similar in terms of risk? (and both bonds currently sell at par? value). The first bond is fully taxable and offers a yield of 9.75?%. The second bond is exempt from both state and federal taxes and offers a yield of 6.10?%. In which bond should she? invest? ?(Round to two decimal? places.)
Jake Baldwin is looking for a? fixed-income investment. He is considering two bond? issues: a. A Treasury with a yield of 7.71?% b. An? in-state municipal bond with a yield of 5.75?% Jake is in the 32?% federal tax bracket and the 6?% state tax bracket. Which bond would provide him with a higher? tax-adjusted yield?
The taxable equivalent yield on the Treasury bond is 8.21?%. (Round to two decimal? places.)
The taxable equivalent yield on the? in-state municipal bond is %. ?(Round to two decimal? places.)