________ bonds are exempt from federal income taxes.
A) Corporate Aaa
B) U.S. Treasury
C) Corporate Baa
D) Municipal

Question

Quizplus · Accepted Answer

Municipal bonds, also known as "munis," are issued by state and local governments and are used to finance public works projects, such as schools, highways, and water treatment plants. The interest income generated from municipal bonds is exempt from federal income taxes and may be exempt from state and local taxes for investors who reside in the issuing state. Therefore, municipal bonds are a popular investment choice for investors seeking tax-free income.

________ Bonds Are Exempt from Federal Income Taxes