A conservative investor from New York in the $35\%$ federal tax bracket and $4\%$ state tax bracket seeks an income producing

investment and needs your help choosing between:

$5\mathrm{.}50\%$ yielding general obligation bond from state of New York

$6\mathrm{.}70\%$ yielding Treasury bond

$8\mathrm{.}00\%$ yielding AAA$-$rated debenture

$6\mathrm{.}70\%$ yielding AA$-$rated convertible bond

Which investment should you recommend?

Select the answer

$5\mathrm{.}50\%$ yielding general obligation bond

$6\mathrm{.}70\%$ yielding Treasury bond

$6\mathrm{.}70\%$ yielding AA$-$rated convertible bond

$8\mathrm{.}00\%$ yief$$ing AAA$-$rated debenture