An Investor Purchases One Municipal and One Corporate Bond That

Multiple Choice

An investor purchases one municipal and one corporate bond that pay rates of return of 7.5% and 10.3%, respectively. If the investor is in the 24% marginal tax bracket, his or her after-tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.

A) 7.5%; 10.3%
B) 7.5%; 7.83%
C) 5.63%; 7.73%
D) 5.63%; 10.3%
E) 10%; 10%