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Someone has purchased two bonds at par value. One is a $1,000 Municipal Bond with a coupon rate of 4% and the other is a
Someone has purchased two bonds at par value. One is a $1,000 Municipal Bond with a coupon rate of 4% and the other is a $1,000 Corporate Bond with a coupon rate of 5%. He is in the 35% tax bracket. What are the after tax returns on the two bonds?
A. | Municipal Bond is 2.6% and The Corporate Bond is 3.25%
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B. | Municipal Bond is 2.6% and The Corporate Bond is 5%
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C. | Municipal Bond is 4% and The Corporate Bond is 5%
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D. | Municipal Bond is 4% and The Corporate Bond is 3.25%
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