Which of the following statements is most correct?
A) Municipalities are not permitted to tax the interest income from securities issued by the U.S. Treasury.
B) Municipal bonds are securities issued by the U.S. Treasury.
C) The equivalent taxable yield is the before-tax yield on Treasury securities.
D) The yield on municipal bonds is more than that on Treasuries with the same maturity.
E) None of the above.

Question

Quizplus · Accepted Answer

Municipalities cannot tax the interest income from U.S. Treasury securities, as federal securities are exempt from state and local taxes.

Which of the Following Statements Is Most Correct