Determine the equivalent level of risk

Reference no: EM131770885

Question: Daniel plans to invest $20,000 in either a corporate bond paying 5% or a tax-exempt bond with a 4% interest rate. The bonds have an equivalent level of risk. Daniel has a 33% marginal tax rate and wants to maximize his after-tax earnings. Daniel should choose which option and why?

Reference no: EM131770885

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