Mr. G has $15,000 to invest. He is undecided about putting the money into tax-exempt municipal bonds paying 3.5 percent annual interest or corporate bonds paying 4.75 percent annual interest. The two investments have the same risk.

1. a-1. Assume Mr.G's marginal tax rate is 32 percent. What is his after-tax yield on the municipal bonds?
2. a-2. What is his after-tax yield on the corporate bonds?
3. a-3. Which investment should Mr. G make?
4. b-1. Assume Mr. G's marginal tax rate is 12%. What is his after-tax yield on the municipal bonds?
5. b-2. What is his after-tax yield on the corporate bonds?
6. b-3. Which investment should Mr. G make?