You Are Trying to Decide Whether It Is Worth Investing

question 163

Multiple Choice

You are trying to decide whether it is worth investing in a municipal bond or a corporate bond. You have identified a corporate bond you like with an 8% yield. If you are in the 30% marginal tax bracket, what comparable interest rate on a municipal bond would you accept?

• A) 2.4% or lower.
• B) 2.4% or higher.
• C) 5.6% or lower.
• D) 5.6% or higher.