Question $11(2$ points$)$ Interest income is taxable in Canada according to the personal marginal tax rate. To help the municipal government to raise money, tax$-$exempt bonds are issued to attract investors. Basically, investors purchasing tax$-$exempt bonds don't need to pay tax on their interest income. An investor is now choosing between two bonds. Bond $\backslash ($ A $\backslash )$ is tax$-$free with a yield to maturity rate of $\backslash (3\backslash \%\backslash ).$ Bond $\backslash ($ B $\backslash )$ is a normal bond. Her limit in her Tax$-$Free Savings Account $($TFSA$)$ account is $\backslash (\backslash$$ $20,000\backslash )$ and her marginal tax rate is $42\backslash \%.$ After thorough consideration, she decided to invest $\backslash (\backslash$$ $30,000\backslash )$ in bond $\backslash ($ A $\backslash )$ and $\backslash (\backslash$$ $20,000\backslash )$ in bond B $.$ Given this allocation decision, what is the most likely YTM for bond B $?$ Hint: The interest income in a TFSA is not taxed. The answer is $\backslash (4\mathrm{.}67\backslash \%\backslash ).$ The answer is $6\mathrm{.}17\backslash \%.$ The answer is $\backslash (5\mathrm{.}67\backslash \%\backslash ).$ The answer is $\backslash (2\mathrm{.}90\backslash \%\backslash ).$