Question: Question 1: You purchased a 5 year bond with a 4% coupon for $1000. If YTM is now 5%, the price of you bond must

Question 1: You purchased a 5 year bond with a 4% coupon for $1000. If YTM is now 5%, the price of you bond must be? A. Below $1000 B. $1000 C. Above $1000 Question 2: A Muni Bond yields 4% and a taxable bond yields 5%. Which bond should you buy and what is your after-tax yield? If you pay 15% in taxes? If you pay 30% in taxes? At what tax rate would you be indifferent between the two bonds

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