Which of the following statements is true?
A)Municipal bond interest is subject to explicit federal tax.
B)Municipal bond interest is subject to implicit tax.
C)Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk.
D)All of these statements are true.
E)None of these statements are true.

Question

Quizplus · Accepted Answer

Municipal bond interest is subject to implicit tax, meaning that it is exempt from federal income tax but may still be subject to state and local taxes. Municipal bonds typically offer lower interest rates than corporate bonds of similar risk.

Which of the Following Statements Is True