Compare the rate of a 10-year Treasury bond to a 10-year municipal bond. Which type of bond would offer you a higher annual yield based on your tax bracket, given that the municipal bond is not subject to federal income taxes?
a. Determine the premium contained in the yield of a 10-year corporate A-rated bond as compared with the 10-year Treasury Bonds
b. Compare that the premium that existed one month ago. Did the premium increase or decrease?
c. Offer an explanation for the change. Is the change attributed to economic conditions?