Imagine a time when you have a high income, placing you in the 32 percent marginal tax bracket.

You are interested in investing some money in a bond issue and have three alternatives. The first is a corporate bond with a 6.4 percent yield to maturity. The second bond is a Treasury that offers a 5.7 percent yield. The third choice is a municipal bond priced at a yield to maturity of 4.0 percent.

Which bond gives you the highest after-tax yield?