An Investor in a 30% Marginal Tax Bracket, Earning $10

An investor in a 30% marginal tax bracket, earning $10 in interest annually for a $100 U.S. Treasury bond:

A) earns a 10% after-tax return because interest on U.S. Treasury bonds is tax exempt at the federal level.
B) earns a 3% return after-tax.
C) would be indifferent between this bond and a municipal bond offering $7 annually per $100 of face value, assuming the same default risk and liquidity characteristics.
D) earns a 1% return after-tax.