You are examining two different MMMFs. Fund A is tax-exempt and pays 7%. Fund B is taxable and pays 9.5%. You live in a state that imposes no income taxes and you are in the 25% federal tax bracket. Which of these two alternatives is better?

A) Find A is the better choice.
B) Fund B is the better choice.
C) Fund A and Fund B are equal so they both are a wise choice.
D) Neither Fund A nor Fund B are wise choices.

Answer: B