Helen has a 32% federal tax rate and lives in California, where she pays a...
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Helen has a 32% federal tax rate and lives in California, where she pays a 12% state income tax rate. She expects all market interest rates to rise by 1% (like from 4% to 5%) over the next few months. One-year BBB corporates now yield 4%, and 20-year BBB corporates yield 5%. AAA California municipals now yield 2.5% for 1-year maturity and 3.5% for 20-year maturity. Her best bond investment in this situation is probably
Question 9 options:
20-year AAA California munis
1-year BBB corporates
20-year BBB corporates
1-year AAA California munis
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