$3.$ Suppose your marginal tax rate is $30\%.$

a$.$ What is your after$-$tax return from holding $($to maturity$)$ a one$-$year corporate bond with a yield to maturity of $10\%?$

b$.$ What is your after$-$tax return from holding $($to maturity$)$ a one$-$year municipal bond with a yield to maturity of $8\%?$

c$.$ If both of these bonds have the same degree of risk and liquidity, which one would you prefer to own? Why?

d$.$ What does this example suggest about the relationship between the interest rates on municipal bonds versus other bonds?