1 a 5-year corporate bond yields 800 a 5-year municipal, Ask an Expert

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1. A 5-year corporate bond yields 8.00%. A 5-year municipal bond of equal risk yields 6.5%. Assume that the state tax rate is zero. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.) a. 21.00% b. 18.94% c. 21.38% d. 18.75% e. 20.25%

2. A portfolio has a floor value of $4 million, a market value of $7 million, and a multiplier of 1.5. The portfolio will be 100% invested in bonds when the portfolio value is A) $10 million B) $4 million C) $12 million D) $8 million

3. Which of the following types of swaps is inconsistent with the efficient market hypothesis? A) Substitution B) Intermarket C) Rate anticipation D) Bond rating

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93041999

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