A treasury professional is deciding between two investment opportunities. The first is a taxable security in the amount of $2,000,000 with a yield of 4.2%. The second is a tax-exempt security for the same amount with a yield of 3.25%. Both securities have the same maturity and a similar risk profile. The marginal income tax rate is 21%. What is the taxable equivalent yield for the tax exempt security?

3.32%

3.25%

2.57%