Which of the following statements about municipal bonds is true?

Question

Quizplus · Accepted Answer

Municipal bonds offer tax-exempt interest, making them attractive primarily to investors in higher tax brackets, not lower ones, as the tax savings can outweigh the typically lower yields compared to taxable bonds. The preference for municipal over corporate bonds is not universal and depends on the investor's tax situation and risk tolerance. Municipal bonds can vary widely in risk, and are not necessarily similar in risk to Treasury bonds, which are backed by the full faith and credit of the U.S. government and considered very low risk.

Which of the Following Statements About Municipal Bonds Is True