A U.S. investor has purchased a tax-exempt 10-year
A U.S. investor has purchased a tax-exempt 10-year municipal bond at a yield of 3.75% which is 100 basis points less than the yield on a 10-year option-free U.S. Treasury. If the investor’s marginal tax rate is 33.5%, then taxable equivalent yield and the yield ratio is closest to:
Taxable equivalent yield Yield ratio
A. 7.14 0.79
B. 5.64 0.79.
C. 5.64 1.19.
参考解答
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2024-11-14 19:20:56
Ans:B;Taxable equivalent yield=3.75%/ (1-33.5%)=5.64Yield ratio= (yield on tax-exempt bond) / (yield of US Treasury)=3.75% / (3.75%+ 1%)= 3.75 / 4.75=0.79
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