Sally is in the 15 percent marginal tax bracket,Ben is in the 25 percent marginal tax bracket,and Julie is in the 28 percent marginal tax bracket.On the basis of only this information,a municipal bond investment would be most attractive to

Question

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Municipal bonds are attractive to investors in higher tax brackets because the interest income from these bonds is often exempt from federal income taxes, and sometimes from state and local taxes as well. Julie, being in the highest tax bracket (28 percent) among the three, would benefit the most from this tax-exempt income, as it would effectively increase her after-tax return on investment compared to Sally and Ben.

Sally Is in the 15 Percent Marginal Tax Bracket,Ben Is