1. An investor has a tax rate of 20% and is considering an investment in a municipal bond or a corporate bond of equivalent risk. The municipal bond has a yield of 3.5% and the corporate bond has yield of 4 25% which bend should the investor choose? At what tax rate would the investor be indifferent between the two bonds?
2. A mutual fund has a 4% front-end load fee and charges 0.25% 12-b-1 fee. If an investor invest $5,000 into the fund and after one year, the fund has a return of 9%, what is the amount the investor has in the fund?