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Sonya Has a Marginal Tax Rate of 38

Question 86

Multiple Choice

Sonya has a marginal tax rate of 38%. A corporate bond is yielding 5.4% and a municipal bond is yielding 2.1%. Sonya should invest in the ________ bond because the critical marginal tax rate is ________ %.


A) corporate; 51
B) corporate; 61
C) corporate; 71
D) municipal; 51
E) municipal; 61

Correct Answer:

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