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An Investor Purchases One Municipal and One Corporate Bond That

Question 59

Multiple Choice

An investor purchases one municipal and one corporate bond that pay rates of return of 6% and 8%, respectively.If the investor is in the 25% marginal tax bracket, his or her after-tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.


A) 6% and 8%
B) 4.5% and 6%
C) 4.5% and 8%
D) 6% and 6%

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