Question:
A financial advisor recommends that you add some municipal
Last updated: 8/4/2022
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A financial advisor recommends that you add some municipal bonds to your portfolio because of their tax advantages. You currently have corporate bonds with a yield of 8.20%. How much do the municipal bonds need to yield for you to consider them equivalent to the corporates (assuming similar risks/ratings for each) if you have a marginal tax rate of 25.00%. (a)10.93% (b)9.07% (c)5.60% (d)7.07% (e)6.15%