Leslie Has a Marginal Tax Rate of 33 Percent and Bill

Leslie has a marginal tax rate of 33 percent and Bill has a marginal tax rate of 37 percent. The critical marginal tax rate for a municipal bond is 35.2 percent. For their taxable investment accounts, Leslie will prefer _____ and Bill will prefer ____. Ignore any risk considerations.

A) corporate bonds; corporate bonds
B) municipal bonds; corporate bonds
C) corporate bonds; municipal bonds
D) municipal bonds; municipal bonds
E) Neither Leslie nor Bill will have a preference for either corporate or municipal bonds.