You can invest in taxable bonds that are paying a yield of 9.9 percent or a municipal bond paying a yield of 8.15 percent. Assume your marginal tax rate is 28 percent.

a.	Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16))

Rate of return

%

b.

Which security bond should you buy?

	Taxable bonds that are paying a 9.9 percent annual rate of return.
	Municipal bond paying a 8.15 percent annual rate of return.