Series 7 - General Securities Representative Exam
John is in the 12% tax bracket. Which of the following bonds will provide John with the highest after tax yield?
GO bonds are not federally taxable. The other 3 are Using the tax-equivalent yield TEY equation, we can see that the Corporate bond will have the highest yield. muni yield / 100% - tax bracket (12%) = 2.27% / So, 2% divided by 88% is 2.27%. The corporate bond yield is higher