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.
General obligation bonds finance projects that produce revenue (tolls, rents, etc.).
Choose wisely. There is only one correct answer.
False. General obligation bonds finance non-revenue-producing projects, such as public roads.
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.
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.
4.
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.
5.
Which of the following is not used to secure a revenue bond?
Choose wisely. There is only one correct answer.
Sales tax. Revenue bonds are secured by the revenues of projects they fund.