Income Beginner: Introduction to Municipal Bonds

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1.
Which of the following is not used to secure a revenue bond?
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Sales tax. Revenue bonds are secured by the revenues of projects they fund.
2.
An insured bond carries a rating that is _______ that of a non-insured bond.
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Higher than. The insurance gives it a higher rating.
3.
Why are municipal bonds sold to the public?
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To raise money to finance operations or projects. Like all forms of government bonds, municipals pay for these expenditures.
4.
The two types of municipal bonds are revenue and agency bonds.
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False. The two types are revenue and general obligation bonds.
5.
All the earnings on a municipal bond are tax-free at the federal level.
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False. The capital gains on the sale of a municipal bond are taxable.