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.

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Definitions:

Origin

The point or place where something begins, arises, or is derived.

Antagonist

In pharmacology, a substance that acts against and blocks an action by binding to a receptor without activating it, effectively preventing the natural ligand or agonist from exerting its effect.

Tendon

A cord-like, fibrous tissue that connects muscle to bone.

Aponeurosis

A fibrous sheet or flat, expanded tendon that attaches muscles to the parts they move.