Typically, the yields on municipal securities are
A)well above the yields on other securities with similar credit ratings and similar terms to maturity.
B)well below the yields on other securities with similar credit ratings and similar terms to maturity.
C)taxed at both the state and federal level.
D)about the same as the yields on other securities with similar credit ratings and similar terms to maturity.

Question

Quizplus · Accepted Answer

Municipal securities usually have lower yields compared to other securities with similar credit ratings and terms to maturity, because they are exempt from federal income taxes and sometimes state and local taxes as well. This tax advantage makes them attractive to investors, leading to lower yields.

Typically, the Yields on Municipal Securities Are