(I)Municipal bonds that are issued to pay for essential public projects are exempt from federal taxation.
(II)General obligation bonds do not have specific assets pledged as security or a specific source of revenue allocated for their repayment.

Question

Quizplus · Accepted Answer

(I) is true as municipal bonds used to fund essential public projects are exempt from federal taxation. This exemption is a significant advantage of investing in municipal bonds. 
(II) is also true as general obligation bonds are backed by the issuer's ability to levy taxes and have no specific asset pledged as security or a particular source of revenue allocated for their repayment.

(I)Municipal Bonds That Are Issued to Pay for Essential Public