Curtis Invests $250,000 in a City of Athens Bond That

question 77

Multiple Choice

Curtis invests $250,000 in a city of Athens bond that pays 7% interest.Alternatively,Curtis could have invested the $250,000 in a bond recently issued by Initech,Inc.that pays 9% interest with similar risk as the city of Athens bond.Assume that Curtis's marginal tax rate is 28%. If Curtis invested in the Initech,Inc.bonds,what would be his after-tax rate of return from this investment?

• A) 5.04%
• B) 7.00%
• C) 6.48%
• D) 2.52%
• E) None of the choices are correct.

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Definitions:

Secondary Reinforcement

A concept in behaviorism where a stimulus reinforces a behavior not because it satisfies a biological need, but because it is associated with a primary reinforcer.

Praise

The expression of approval, commendation, or admiration towards someone or something.

Awards

Recognitions or prizes given for achievement, excellence, or performance in a particular field or discipline.

Positive Reinforcement

An increase in future behavior due to the addition of a stimulus immediately following a response.