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