Question

Why are municipal bonds attractive to investors?

	a.	Issuers of municipal bonds are legally obliged to back the bonds.
	b.	They have lower interest rates than other types of bonds.
	c.	Interest earned on them is exempt from federal taxes.
	d.	They pay a guaranteed dividend.
	e.	They have a low par value.

Answer 1

The main advantage of municipal bonds when compared to any other bonds is that the interest earned from municipal bonds is actually exempt from the federal income taxes and that is the reason why many people actually get to buy municipal bonds in order to save the taxes on the whole and that is the reason why

(C) is the answer to this question

less interest rate than other type of bonds is actually a disadvantage and also every bond is backed by the issue and there are many bones which Pay guaranteed dividend and have low power value which is the reason why the above reasons are not a source of attraction and that is

(A,B,D,E) are wrong