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You need to choose between investing in a tax-exempt, one-year municipal bond with a 7 percent yield and a one-year corporate bond with an 11

You need to choose between investing in a tax-exempt, one-year municipal bond with a 7 percent yield and a one-year corporate bond with an 11 percent yield. If your marginal federal income tax rate is 30 percent and no other differences exist between these two securities, which one would you choose?

Municipal bond

Corporate bond

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