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Suppose that you are a saver with a choice of three financial assets that are identical in every way except their nominal interest rate and

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Suppose that you are a saver with a choice of three financial assets that are identical in every way except their nominal interest rate and taxability Calculate the after tax real yield for each of the following three assets and choose which of the three assets is the best option if inflation is expected to be 2.15% annually Asset 1: Interest rate 6,5%, with a federal income tax rate of 24% and a state income tax rate of 85% Asset 2: Interest rate 6%, with a federal income tax rate of 28% and a state income tax rate of 0% Asset 3: Interest rate 5.0% interest taxed at 0%

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