Answer:
The interest rate on corporate bond is 7.87 percent.
Explanation:
The yield on 7-year municipal bond = 4.8%
Given marginal tax rate = 39 percent
Now calculate the interest rate on 7 year corporate bond that has equal risk.
Use the below formula. Here, yield from both type of bond is equated that is yield from corporate bond and yield from municipal bond because it is given that both gives same return after tax.
Interest rate on corporate bond × (1-tax rate) = Municipal bond yield
Interest rate on corporate bond × (1- 0.39) = 4.8![\text{Interest rate on corporate bond} = \frac{4.8}{0.61} = 7.87 \ percent](https://tex.z-dn.net/?f=%5Ctext%7BInterest%20rate%20on%20corporate%20bond%7D%20%3D%20%5Cfrac%7B4.8%7D%7B0.61%7D%20%3D%207.87%20%5C%20%20percent)
Answer:
Credit life Insurance
Explanation:
The scenario describes Credit life insurance
This is a form of insurance policy that that is designed to pay off the balance on a policy holder's outstanding loan in case of death. It is designed for the protection of lender and heirs who are co signers from loss in case of the death of the borrower.
The insurance is liable to the balance on the loan as at the time of the death of the borrower.
Answer:
A) <em>a moral judgement.</em>
Explanation:
(´・ω・`) hope this helps!