A bank is considering two securities: a 30-year Treasury bond yielding
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A bank is considering two securities: a 30-year Treasury bond yielding 10 percent and a 30-year municipal bond yielding 6 percent. a. If the bank’s tax rate is 20 percent, calculate the treasury bond’s after-tax yield. (Round your answer to 1 decimal
place. (e.g., 32.1) ) After-tax yield % b. Which bond offers the higher after-tax yield? 30-year treasury bond 30-year municipal bond
.
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