Moody's scale$)$ or better are considered bonds. But bonds with lower ratings are considered speculative and often referred to as bonds.

high yield: investment$-$grade or high$-$quality

non investment$-$grade: high yield or high quality

investment$-$grade: high vield or junk

non investment$-$grade; investment grade or high vield

What is the net yield or after$-$tax return on a $$1,000,000$ municipal bond with a coupon rate of $8\%$ versus a $$1,000,000$ corporate bond with a coupon rate of $10\%?$ Assume that all bond investors are in the $25\%$ tax bracket and both bonds pay interest annually. Also, the municipal bond is tax$-$exempt, but the corporate bond is not.

$7\mathrm{.}5\%$ on the municipal bond versus $8\%$ on the corporate bond.

$10\%$ on the municipal bond versus $8\%$ on the corporate bond.

$8\%$ on the municipal bond versus $10\%$ on the corporate bond.

$8\%$ on the municipal bond versus $7\mathrm{.}5\%$ on the corporate bond.