The main advantage of municipal securities is that
A)their credit risk is usually very low.
B)the interest income earned is exempt from federal income tax and taxes in the issuing state.
C)they are the most liquid type of securities.
D)Both a and b are correct.

Question

Quizplus · Accepted Answer

Municipal securities have the advantage of low credit risk, as they are issued by local governments with taxing authority. Additionally, their interest income is exempt from federal income tax and taxes in the issuing state, making them particularly attractive to investors in higher tax brackets.

The Main Advantage of Municipal Securities Is That