An investor purchases one municipal bond and one corporate bond that pay rates of return of 5%
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Question:
An investor purchases one municipal bond and one corporate bond that pay rates of return of 5% and 6.4%, respectively. If the investor is in the 15% tax bracket, his after-tax rates of return on the municipal and corporate bonds would be, respectively, _____.Show your work
A.
5% and 6.4%
B.
5% and 5.44%
C.
4.25% and 6.4%
D.
5.75% and 5.44%
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