Which bond offers the higher after-tax yield

Reference no: EM131941442

Question: A bank is considering two securities: a 30-year Treasury bond yielding 7 percent and a 30-year municipal bond yielding 2 percent.

a. If the bank's tax rate is 35 percent, calculate the Treasury bond's after-tax yield. (Round your answer to 1 decimal place. (e.g., 32.1)) After-tax yield %

b. Which bond offers the higher after-tax yield? 30-year Treasury bond 30-year municipal bond

Reference no: EM131941442

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