A municipal variable rate demand note (VRDN)
I.is a long-term security;
II.has interest payments linked to the level of short-term interest rates;
III.may periodically be sold back to the issuer at face value;
IV.is tax-exempt
A)I only
B)I and II only
C)I, II, and III only
D)I, II, III, and IV

Question

Quizplus · Accepted Answer

Municipal variable rate demand notes (VRDNs) are indeed long-term securities whose interest payments are tied to short-term interest rates. They offer the option to be sold back to the issuer at face value periodically and are typically tax-exempt, making all four statements correct.

A Municipal Variable Rate Demand Note (VRDN)