At a given market interest rate, a loan that uses simple interest compounding will offer lower payments for the borrower than a loan that uses compound interest.

True

False

Based on tax considerations alone, which of the following bonds would likely be the most attractive to an investor in the highest federal plus state marginal income tax bracket?

A corporate bond selling at its par value in the market.

A municipal bond selling at a premium to par in the market.

A corporate bond selling at a discount to par in the market.

A municipal bond selling at a discount to par in the market.

A US Treasury bond selling at a premium to par in the market.