Question 1
Which of the following statements is
not true regarding municipal bonds?
◦ They are issued by state and local governments.
◦ They are free from the risk of default.
◦ The interest is exempt from federal income taxes.
◦ The interest is exempt from state taxes if the investor resides in the state where the bond was issued.
Question 2
Federal agency bonds are all of the following
except
◦ issued by government agencies or government-sponsored entities.
◦ have a very low degree of default risk.
◦ issued by Ginnie Mae, Freddie Mac, and Fannie Mae.
◦ exempt from all taxation.