Yield Equivalence

Yield Equivalence means:
the rate of interest at which a tax-exempt bond and a taxable security of similar quality provide the same after-tax return. A taxable yield is converted to a tax-exempt yield by reducing the taxable yield by the investor's marginal tax bracket. For example, a taxable yield of 10% is equivalent to a tax-free yield of 7.2% for an investor in the 28% marginal tax bracket.