Income Beginner: Introduction to Municipal Bonds

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1.
General obligation bonds finance projects that produce revenue (tolls, rents, etc.).
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False. General obligation bonds finance non-revenue-producing projects, such as public roads.
2.
Municipal bonds are usually issued in _______ denominations or multiples thereof.
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$5,000. In most cases, it is $5,000.
3.
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.
4.
Of the following tax brackets, which one will leave you with the highest yield on a municipal bond compared to a taxable bond?
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35 percent. The higher the tax bracket, the more you earn when the bond is compared to a taxable bond.
5.
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.