Interest Rate Risk of Corporate Bonds

19. An investor who pays taxes at the 28% marginal tax rate would need to earn what coupon rate on a corporate bond similar in all respects other than taxes to a 5% coupon municipal bond: a. 1.40%. b. 2.50%. c. 5.00%. d. 6.94%. Ans: d. Difficulty: Moderate. Ref: Fixed-Income Securities. 20. Interest on bonds is typically paid: monthly ... ................
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