The key factor to be considered before investing in municipal bonds is
A) they are financially advantageous mainly to high tax rate investors.
B) they are generally not as liquid as high-grade corporate bonds.
C) in order to diversify you should invest in a municipal bond fund rather than specific bonds.
D) All of the above are key considerations.

Question

Quizplus · Accepted Answer

All the options listed are key considerations before investing in municipal bonds. A) Municipal bonds are particularly beneficial for investors in high tax brackets due to their tax-exempt status. B) They tend to be less liquid than high-grade corporate bonds, which can affect their buy/sell dynamics. C) Investing in a municipal bond fund can offer diversification benefits compared to investing in specific bonds, spreading out risk.

The Key Factor to Be Considered Before Investing in Municipal