The yield on tax-exempt bonds is ________.
A) usually less than 50% of the yield on taxable bonds
B) normally about 90% of the yield on taxable bonds
C) greater than the yield on taxable bonds
D) less than the yield on taxable bonds

Question

Quizplus · Accepted Answer

Tax-exempt bonds typically offer a lower yield than taxable bonds because they provide a tax advantage for investors. This means that investors are willing to accept a lower interest rate in exchange for the tax savings. Therefore, the yield on tax-exempt bonds is generally less than the yield on taxable bonds.

The Yield on Tax-Exempt Bonds Is ________