Municipal bonds pay a relatively
A) low rate of interest because of their high default risk and because the interest they pay is subject to federal income tax.
B) low rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax.
C) high rate of interest because of their high default risk and because federal taxes must be paid on the interest they pay.
D) high rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax.
Correct Answer:
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