Assume you are choosing between a corporate bond and a municipal $($local gov.$)$ bond. Both bonds have similar risk level. Payments you receive on the municipal bond are tax exempt. YTM $($interest rate$)$ of corporate bond is $6\%,$ YTM of municipal bond is $4\mathrm{.}5\%.$ If you tax rate is $28\%,$ which bond should you choose?Assume you are choosing between a corporate bond and a municipal $($local gov.$)$ bond. Both bonds have

similar risk level. Payments you receive on the municipal bond are tax exempt. YTM $($interest rate$)$ of corporate

bond is $6\%,$ YTM of municipal bond is $4\mathrm{.}5\%.$ If you tax rate is $28\%,$ which bond should you choose?

Select one:

a$.$ Neither of the bonds

b$.$ Municipal bond

c$.$ Corporate bond

d$.$ Both bonds