Income Beginner: Introduction to Municipal Bonds

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1.
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.
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.
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.
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.