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Author Question: If a fully-taxable bond yields a BTROR of 8% (Rb= 8%) and a tax-exempt bond of similar risk earns a ... (Read 228 times)

ARLKQ

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Question 1

If a fully-taxable bond yields a BTROR of 10% (Rb = 10%) and a tax-exempt bond of similar risk earns a BTROR of 7.5% (Rf = 7.5%), then the implicit tax rate is
◦ 25%.
◦ 75%.
◦ 10%.
◦ None of these.

Question 2

If a fully-taxable bond yields a BTROR of 8% (Rb = 8%) and a tax-exempt bond of similar risk earns a BTROR of 5% (Rf = 5%), then the implicit tax is
◦ 3%.
◦ 5%.
◦ 8%.
◦ None of these.


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Marked as best answer by ARLKQ on Sep 13, 2020

Kaytorgator

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ARLKQ

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Reply 2 on: Sep 13, 2020
Great answer, keep it coming :)


aliotak

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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