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1. Benny Hill wants to invest $35,000 in bonds.  He can buy a corporate bond with a yield of 8 percent or a municipal bond with a yield of 6 percent.  Benny is in the 31% marginal tax bracket.  Which should he select?

Choose the Municipal Bond as 8.69% is a better rate than 8.00% (corporate bond)

Choose the Municipal Bond as 8.00% is a better rate than 8.89% (corporate bond)

Choose the Corporate Bond as 8.69% is a better rate than 8.00% (municipal bond)

Choose the Corporate Bond as 8.00% is a better rate than 8.69% (municipal bond)

2. Were you to invest $50 each month into a mutual fund which averaged an 11% annual return, what would be the mutual fund account value after 12 years? Ignore the impact of taxes and inflation.

$14,841.70

$14,977.75

$15,126.98

$13,627.91

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92415596

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