Answer question 5-7, show your answer as specific as possible

5. Consider a portfolio of municipal bonds that have the same maturity and same perceived risk of default as a portfolio of corporate bonds. If the federal income tax rate increases, what will happen to the price [not yield] of those municipals relative to the price of the corporates? Explain. [Think about which one will be more desirable given the change] 6. The rates on certicates of deposit of a given maturity are systematically different from treasury bills of the same maturity. Are they higher or lower? Why? Do you expect the difference between the two rates to increase or decrease in nancial crisis times? 7. Going Public. What are the reasons that a company' s managers and investors would want to take a company public