Consider the following investments:

$10,000 of stock that pays a 3% annual yield. It's dividends are qualified

$10,000 of a municipal bond that pays 2.8% annual interest. It is federally exempt from taxes

$10,000 of a Certificate of Deposit that pays 3.0% annual interest. Cash interest is paid on December 31st

All investments will be held for a year. The buyer is in the highest income tax rate.

Required: What will be the before tax and after tax return for each investment. Which investment would you choose considering risk and after tax return. The investor is 40 years old and wishes to earn income on their emergency savings. They want the ability to turn the investment into cash quickly should they need to.

Submit your answer to the above calculations and recommendation in a word document.