The higher one's tax bracket,the more favorable municipal bonds will be compared to other types of bonds.

Question

Quizplus · Accepted Answer

Municipal bonds are exempt from federal taxes and sometimes state and local taxes. Therefore, they become more attractive to investors in high tax brackets as they can minimize the amount of taxes they owe on interest income. This makes them more favorable than other types of bonds that are subject to taxation.

The Higher One's Tax Bracket,the More Favorable Municipal Bonds Will