Curtis invests $775,000 in a city of Athens bond that pays 9.75% interest. Alternatively, Curtis could have invested the $775,000 in a bond recently issued by Initech, Inc. that pays 12% 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

2.73%

3.36%

9.75%

12.00%

None of the choices are correct.