Suppose you're evaluating three alternative MMM investments. The first fund buys a diversified portfolio of municipal securities from
across the country and yields 3.5 percent. The second fund buys only taxable, short-term commercial paper and yields 5.5 percent. The third fund specializes in the municipal debt from the state of New Jersey and yields 3.2 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.