Yields on municipal bonds are typically ________ yields on corporate bonds of similar risk and time to maturity.

Question

Quizplus · Accepted Answer

Municipal bonds are issued by state or local governments and are generally considered to have lower default risk than corporate bonds, which are issued by corporations. Therefore, investors are willing to accept lower yields on municipal bonds, making their yields typically lower than those of corporate bonds with similar risk and time to maturity.

Yields on Municipal Bonds Are Typically ________ Yields on Corporate