Income Beginner: Introduction to Municipal Bonds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Municipal bonds are sold by all but which of the following?
Choose wisely. There is only one correct answer.
The federal government. This entity sells only US government bonds.
2.
Insured bonds pay interest rates that are _______ those of non-insured bonds.
Choose wisely. There is only one correct answer.
Lower than. The insurance makes them safer in the eyes of investors, so issuers can offer lower interest rates.
3.
What is the security behind general obligation bonds?
Choose wisely. There is only one correct answer.
The creditworthiness of the issuer. There is no monetary backing or other collateral.
4.
In addition to receiving income from municipal projects, some revenue bonds may be secured by _______.
Choose wisely. There is only one correct answer.
Private endowments. Individual or corporate investors may donate funds to help pay off a revenue bond issue.
5.
All the earnings on a municipal bond are tax-free at the federal level.
Choose wisely. There is only one correct answer.
False. The capital gains on the sale of a municipal bond are taxable.