Series 7 - General Securities Representative Exam
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What is the tax equivalent yield of an 7.30 % Special Assessment bond for an investor in the 37% tax bracket?
5.90%
A
11.59%
B
19.73%
C
8.69%
D
Explanations
Remember the TEY formula: muni yield (7.3%) / (100%) - tax bracket (37%) = 7.3/63 = 11.59%