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Basic Question 7 of 8
An investor is currently considering the choice between a corporate and a municipal bond. The yield on these two bonds is given below.
10-year corporate bond: 6.43
10-year municipal bond: 5.20
B. 4.44
C. 4.63
Securities: Yield
10-year corporate bond: 6.43
10-year municipal bond: 5.20
The investor's marginal tax rate is 28%. What is the after tax-yield on the corporate bond?
A. 3.74
B. 4.44
C. 4.63
User Contributed Comments 1
| User | Comment |
|---|---|
| DonAnd | u could imagine the question specifically asks for the after-tax yield on the CORPORATE bond and silly me calculated for the municipal bond....ahhhh!!!! careless!!!!! |
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Learning Outcome Statements
describe how legal, regulatory, and tax considerations affect the issuance and trading of fixed-income securities
CFA® 2025 Level I Curriculum, Volume 4, Module 2.