John Smith is in the 28 percent tax bracket.If he were to purchase a $1,000 municipal bond that had a stated interest rate of 6.9%,the taxable equivalent yield would be:
Julie Johnson is in the 31 percent tax bracket.If she were to purchase a $1,000 municipal bond that had a stated interest rate of 6.5%,the taxable equivalent yield would be:
When interest rates rise,bond prices will:
A) return to a steady price.
D) vary unpredictably.
E) not be affected.
The approximate yield-to-maturity of a bond is greater than the stated rate of interest when:
A) purchased at face value.
B) purchased at a discount.
C) purchased at a premium.
D) market rates of interest decline.
E) market rates of interest are constant.