INVESTOR A’S MARGINAL TAX RATE IS 45%, WHILE INVESTOR B’S IS 30%....

54. - MOCK AND SAMPLE EXAMS CFA 2012 L1 SAMPLE EXAM V1 QUESTION 54. - MOCK AND SAMPLE EXAMS CFA 2012 L1 SAMPLE EXAM V1 QUESTION
MOCK AND SAMPLE EXAMS CFA 2012 L1 SAMPLE EXAM V1 QUESTION
54. Investor A’s marginal tax rate is 45%, while Investor B’s is 30%. Both investors are considering two bonds for inclusion in a taxable portfolio. One bond is tax-exempt with a yield of 4.50%, while the other is taxable with a yield of 6.30%. Which bond will each investor most likely choose? A．Both investors will choose the taxable bond. B．Both investors will choose the tax-exempt bond. C．Investor A will choose the tax-exempt bond and investor B will choose the taxable bond.