Curtis invests $475,000 in a city of Athens bond that pays 6.75% interest. Alternatively, Curtis could have invested the $475,000 in a bond recently issued by Initech, Inc. that pays 8.25% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 28%.

What is Curtis's after-tax rate of return on the city of Athens bond?

Multiple Choice

1.89%

None of the choices are correct.

8.25%

6.75%

2.31%