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% interest. Alternatively, Curtis 8c5o) uld have invested the $250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Curtis' marginal tax rate is 28%.If Curtis invested in the Initech, Inc. bonds, what would be his after-tax rate of return from this investment?

A) 7.00%
B) 5.04%
C) 6.48%
D) 2.52%
E) None of the choices are correct.