问题详情

A U.S. investor has purchased a tax-exempt 10-year municipal bond at a yield of 3.75% which is 100 basis points less than the yield on a 10-year option-free U.S. Treasury. If the investor’s marginal tax rate is 33.5%, then taxable equivalent yield and the yield ratio is closest to:
Taxable equivalent yield Yield ratio
A. 7.14 0.79
B. 5.64 0.79.
C. 5.64 1.19.