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Suppose you're evaluating three alternative MMMF investments. The first fund buys a
diversified portfolio of municipal securities from across the country and yields 2.6 percent. The
second fund buys only taxable, short-term commercial paper and yields 5 percent. The third fund
specializes in the municipal debt from the state of New Jersey and yields 2.3 percent. You are a
New Jersey resident, your federal tax bracket is 35 percent, and your state tax bracket is 8
percent. (Assume your state taxes do not affect your federal taxable income.) a. Calculate the
aftertax yield for each of the alternatives. (Do not round intermediate calculations. Enter your
answers as a percent rounded to 2 decimal places.)

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