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Assume a municipal bond has a yield of 6.25% and corporate bond of comparable maturity and credit rating has a yield of 8.0%. For investors
Assume a municipal bond has a yield of 6.25% and corporate bond of comparable maturity and credit rating has a yield of 8.0%. For investors in the 20% and 25% marginal tax brackets, state whether the muni, corporate or either is the best investment choice.
A. 20% Marginal Rate: Muni / 25% Marginal Rate: Muni
B. 20% Marginal Rate: Corporate / 25% Marginal Rate: Muni
C. 20% Marginal Rate: Corporate / 25% Marginal Rate: Corporate
D. 20% Marginal Rate: Corporate / 25% Marginal Rate: Either
E. 20% Marginal Rate: Either / 25% Marginal Rate: Muni
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