For a taxable security, the tax exempted interest rate on municipal bonds used to determine the ___________?
Atax equivalent rate of return
Bwithholding tax rate
Clocal rate of return
Dgeneral sales tax rate
Correct answer
A. tax equivalent rate of return
Explanation
tax equivalent rate of return is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.