Within the category of capital market securities, municipal bonds have the before-tax yield, and their after-tax yield is typically of Treasury bonds from the perspective of investors in high tax brackets.
A)highest; below that
B)lowest; above that
C)highest; above that
D)lowest; below that

Question

Within the category of capital market securities, municipal bonds have the            before-tax yield, and their after-tax yield is typically            of Treasury bonds from the perspective of investors in high tax brackets.
A)highest; below that
B)lowest; above that
C)highest; above that
D)lowest; below that

Quizplus · Accepted Answer

Municipal bonds generally offer the lowest before-tax yield because the interest income is exempt from federal income taxes and, in some cases, state and local taxes as well. For investors in high tax brackets, this tax exemption can make the after-tax yield of municipal bonds higher than that of Treasury bonds, which are subject to federal income tax.

Within the Category of Capital Market Securities, Municipal Bonds Have