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How do I decide between a tax-free or a regular bond?

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How do I decide between a tax-free or a regular bond?

Answered By Editor


Deciding to choose a tax-free bond and a regular bond is very simple. All you have to do is follow these simple steps in order to determine which will be more beneficial for you:

- Convert the regular bond's rate that will be equal to the after tax rate.

- Compare it with the tax-free bond's interest rate.

- The larger interest rate wins.

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