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 25% marginal tax bracket, his or her after tax rates of return on the municipal and corporate bonds would be___and___, respectively.

A. never quoted in the financial press.

B. the price at which the dealer in T-bills is willing to sell the bill.

C. greater than the asked price of the T-bill.

D. the price at which the dealer in T-bills is willing to buy the bill.

E. the price at which the investor can buy the T-bill

A. the most shareholders can lose is their original investment in the firm's stock and the claims of preferred shareholders are honored before those of the common shareholders.

B. bondholders have claim to what is left from the liquidation of the firm's assets after paying the shareholders.

C. the claims of preferred shareholders are honored before those of the common shareholders.

D. common shareholders are the first in line to receive their claims on the firm's assets.

E. the most shareholders can lose is their original investment in the firm's stock.

A. there are so many different kinds of bonds.

B. corporations are not required to disclose the details of their bond issues.

C. bonds tend to trade infrequently, making price information difficult to obtain.

D. prices cannot be obtained for companies that operate in emerging markets.

E. they cannot be based on firms' market values.

A. 28%

B. 72%

C. Cannot tell from the information given

D. 33%

E. 15%

A. the New York Stock Exchange

B. the Federal Reserve Bank

C. large, well-known companies

D. state and local governments

E. commercial banks

A. commercial banks

B. the U.S. government and agencies of the federal government

C. state and local governments

D. agencies of the federal government

E. the U.S. government