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Funds 309: Municipal Bond Funds

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1.
Municipal bond funds include all of the following except _______.
Choose wisely. There is only one correct answer.
Corporate bonds. Companies in the private sector issue corporate bonds; that is why they cannot be included in municipal bond funds.
2.
Municipal bond funds contain more general obligation bonds than revenue bonds.
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False. Generally, they contain more revenue bonds, since revenue bonds are much more common.
3.
Municipal bond funds earn less than corporate bond funds because their bonds are _______.
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Tax-free. Issuers of municipal bonds can afford to offer less because investors will save money on taxes.
4.
Municipal bond funds that carry _______ on their bonds guarantee payments of interest and principal.
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Insurance. The insurance guarantees that investors receive interest and principal even if the bond issuer defaults.
5.
The bonds in municipal bond funds are issued by the federal government.
Choose wisely. There is only one correct answer.
False. States and smaller units of government issue them.