You are examining two different MMMFs. Fund A is tax-exempt and pays 5%. Fund B is taxable and pays 6%. You live in a state that imposes no income taxes and are in a 28% federal tax bracket. At what tax rate would the two funds have identical yields?

A) 16.67%
B) 17.76%
C) 20.23%
D) 28.00%
E) Cannot determine from the information provided


Answer: A

Business

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