Which of the following statements is true?
A) State and local governments cannot default on their bonds.
B) Bonds issued by state and local governments are called municipal bonds.
C) All government issued bonds - local, state, and federal - are federal income tax exempt.
D) The coupon payment on municipal bonds is usually higher than the coupon payment on Treasury bonds.

Question

Quizplus · Accepted Answer

Bonds issued by state and local governments are called municipal bonds. Choice A is incorrect because state and local governments can default on their bonds. Choice C is incorrect because only municipal bond interest is federally tax-exempt, not all government-issued bonds. Choice D is incorrect because typically, the coupon payment on municipal bonds is lower than that of Treasury bonds.

Which of the Following Statements Is True