If an investor has a tax rate on interest income of 25% and the inflation rate is 4%, which bond has the lowest expected after-tax real interest rate?

If an investor has a tax rate on interest income of 25% and the inflation rate is 4%, which bond has the lowest expected after-tax real interest rate? 



(a) A Treasury bond paying 9%
(b) A corporate bond paying 8%
(c) A Treasury bond paying 7%
(d) A municipal bond paying 6%





Answer: C


Learn More :