Income Beginner: Introduction to Municipal Bonds

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1.
What does taxable equivalent yield tell you?
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How much you'd have to earn on a taxable bond to equal what you are earning on a municipal bond. You can use the formula to figure out whether to buy a municipal or a taxable bond.
2.
In addition to receiving income from municipal projects, some revenue bonds may be secured by _______.
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Private endowments. Individual or corporate investors may donate funds to help pay off a revenue bond issue.
3.
Insured bonds pay interest rates that are _______ those of non-insured bonds.
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Lower than. The insurance makes them safer in the eyes of investors, so issuers can offer lower interest rates.
4.
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.
5.
What is the security behind general obligation bonds?
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The creditworthiness of the issuer. There is no monetary backing or other collateral.