Municipal bonds are better for investors who are

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the issuer expects to eventually repay the bonds and make the interest payments. Municipal bonds are better for investors who are included in high tax brackets. However, when you buy a municipal bond you could receive a lower coupon rate or current yield than you could get with a corporate bond of the same maturity.Corporate bonds can feature a call provision in which the issuing company pays back the principal to bond holders before maturity is reached. Corporate bonds usually have higher yields than that of Municipal bonds because there is more risk
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involved in corporate bonds (due to unforeseeable financial problems) and because corporate bonds are taxable. US Treasury Bonds Maturity Yield Yesterday Last Week Last Month 3 Month 0.08 0.08 0.06 0.08 6 Month 0.12 0.12 0.12 0.12 2 Year 0.25 0.25 0.23 0.25 3 Year 0.34 0.34 0.30 0.32 5 Year 0.66 0.67 0.61 0.64 10 Year 1.71 1.74 1.62 1.67 30 Year 2.92 2.97 2.81 2.82 Municipal Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 0.58 0.59 0.57 0.54 2yr AAA 0.44 0.45 0.40 0.36 2yr A 0.70 0.66 0.80 0.61 5yr AAA 0.74 0.84 0.64 0.80 5yr AA 0.97 1.02 0.95 1.03 5yr A 1.31 1.32 1.23 1.35 10yr AAA 1.69 1.81 1.62 1.78 10yr AA 1.68 1.73 1.85 1.69 10yr A 2.45 2.46 2.42 2.24 20yr AAA 2.69 2.79 2.86 3.02 20yr AA 2.88 2.97 3.04 2.93 20yr A 2.77 2.83 3.01 2.88 Corporate Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 0.50 0.49 0.49 0.47 2yr A 0.71 0.69 0.70 0.77 5yr AAA 0.74 0.73 0.74 0.82 5yr AA 1.17 1.15 1.21 1.26 5yr A 1.59 1.52 1.56 1.69 10yr AAA 2.34 2.33 2.25 2.60 10yr AA 2.45 2.47 2.48 2.51 10yr A 2.68 2.67 2.59 2.55 20yr AAA 3.78 3.78 3.68 3.81 20yr AA 3.65 3.64 3.61 3.60 20yr A 3.95 3.94 3.85 3.97 References: Brigham, E. F., & Houston, J. F. (2012). Fundamentals of financial management . (seventh ed.). Manson,OH: Cengage Learning. Composite Bond Rates. (2012).Yahoo! Finance. Retrieved October 09, 2012, from http://finance.yahoo.com/bonds/composite_bond_rates
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Learning About Bond Investing. (2012). Yahoo! Finance. Retrieved October 09, 2012, from http://finance.yahoo.com/education/bond#Types%20of%20Bonds
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