Clark, a single taxpayer with expected taxable income of $190,000, needs your advice on an investment decision. Clark wants to invest $10,000 in long-term bonds. Clark can obtain a 6% return by investing in 10-year Ford Motors' bonds. What is the minimum interest rate that Clark should demand from an investment in State of Tennessee bonds of identical risk and duration?

a. 4.0%.
b. 4.5%.
c. 9.0%.
d. 10.0%.


a

Business

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