Bond would provide sara with the higher tax-adjusted yield

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Reference no: EM131317104

Sara Nixon is looking for a fixed-income investment. She is considering two bond issues:

a. A treasury bond with a yield of 5%

b. An in-state municipal bond with a yield of 4%

Sara is in the 33% federal tax bracket and the 8% state tax bracket. Which bond would provide Sara with the higher tax-adjusted yield?

Reference no: EM131317104

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