A municipal bond issue has a serial component when:
A) holders of the bonds must report the serial numbers of the bonds to the Internal Revenue Service also called registered bonds).
B) tax revenues are pledged for repayment.
C) the issue has bonds of varying terms to maturity.
D) only a single coupon rate will be paid

Question

Quizplus · Accepted Answer

A serial component in a municipal bond issue refers to the fact that the issue has bonds of varying terms to maturity. This means that some bonds in the issue will mature earlier than others, creating a serial structure. This can be beneficial for issuers as it allows for more flexibility in managing debt payments.

A Municipal Bond Issue Has a Serial Component When