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olganol [36]
3 years ago
8

Suppose you’re evaluating three alternative MMMF investments. The first fund buys a diversified portfolio of municipal securitie

s from across the country and yields 3.95 percent. The second fund buys only taxable, short-term commercial paper and yields 5.7 percent. The third fund specializes in the municipal debt from the state of New Jersey and yields 3.6 percent. If you are a New Jersey resident, your federal tax bracket is 35 percent, and your state tax bracket is 8 percent.1. Calculate the aftertax yield for each of the alternatives. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Aftertax Yield Municipal fund 3.95 % Taxable fund 3.31 % New Jersey municipal fund %2. Which of these three MMMFs offers you the highest aftertax yield?a. New Jersey Fundb. Municipal Fundc. Taxable Fund
Business
1 answer:
Tju [1.3M]3 years ago
7 0

Answer:

1) After tax yield for each alternative will be calculated as;

Municipal Fund after-tax yield = 0.0395*(1-0.08)

Municipal Fund after-tax yield = 0.0395*0.92

Municipal Fund after-tax yield =  0.03634

Municipal Fund after-tax yield = 3.63

Taxable Fund after-tax yield = 0.057(1 - 0.35 -0.08)

Taxable Fund after-tax yield = 0.057*0.57

Taxable Fund after-tax yield = 0.03249

Taxable Fund after-tax yield = 3.25

New jersey municipal fund after-tax yield =

2) Municipal fund offers the highest after-tax yield out of these three MMMF's

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Arte-miy333 [17]

Answer:

See below

Explanation:

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You wish to buy a cabin in 15 years. TODAY, the cabin costs $150,000. You believe the price of the cabin will inflate at 4% annu
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Answer:

I will need to invest 64,669.73 dollars now.

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