Curtis Invests $250,000 in a City of Athens Bond That

Multiple Choice

Curtis invests $250,000 in a city of Athens bond that pays 7 percent interest.Alternatively, Curtis could have invested the $250,000 in a bond recently issued by Initech, Inc.that pays 9 percent interest with similar risk as the city of Athens bond.Assume that Curtis's marginal tax rate is 24 percent. What is Curtis's after-tax rate of return on the city of Athens bond?

A) 5.32 percent
B) 6.84 percent
C) 7.00 percent
D) 9.00 percent
E) None of the choices are correct