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OpenStudy (anonymous):
Calculating tax-equivalent yield. Assume you are in the 35 percent tax bracket and purchase a 4.80 percent tax-exempt municipal bond. Use formula presented in this chapter to calculate the taxable equivalent yield for this investment.
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OpenStudy (anonymous):
(1-0.35) x = 4.80% x = 4.80/0.65 = 7.38%
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