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The collateral for revenue bonds comes from the projects that they fund.

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True

False

True. The tolls, rents, etc. serve as collateral in the event of default.

Municipal bond funds include all of the following except _______.

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Municipal notes

General obligation bonds

Revenue bonds

Corporate bonds

Corporate bonds. Companies in the private sector issue corporate bonds; that is why they cannot be included in municipal bond funds.

A "tax-free fund" is likely to be a municipal bond mutual fund.

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True

False

True. Most tax-free funds invest in municipal bonds.

Which of the following does not affect a municipal bond fund's coupon rate?

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Inflation

Interest rates

Maturities of bonds in the fund

Credit risk

Inflation. Inflation affects the purchasing power of returns, but only after they have been earned.

The bonds in municipal bond funds are issued by the federal government.

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True

False

False. States and smaller units of government issue them.

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