Holding All Other Factors That Affect Yields Constant, Following Passage

Multiple Choice

Holding all other factors that affect yields constant, following passage of the Tax Reform Act of 1986which lowered marginal income tax ratesyields on

A) municipal bonds should have fallen relative to yields on U.S. Treasury securities.
B) U.S. Treasury securities should have fallen relative to yields on corporate bonds.
C) municipal bonds should have risen relative to yields on corporate bonds.
D) corporate bonds should have risen relative to the yields on U.S. Treasury securities.