Products & RisksPregunta 8 de 125
Interest paid on general obligation municipal bonds to a resident investor is generally:
a.Fully taxable at the federal, state, and local levels
b.Exempt from federal income tax and often exempt from state tax for in-state residents
c.Subject only to federal tax but exempt from all state tax nationwide
d.Taxed as a long-term capital gain
Explicación
Interest on municipal bonds is generally exempt from federal income tax, and is typically also exempt from state and local tax for residents of the issuing state (the 'triple tax-exempt' feature for in-state holders). This tax treatment is why municipal yields are compared on a taxable-equivalent basis.
Practica las 125 preguntas gratis — sin registro.
Preguntas relacionadas de este tema
- A corporate bond with a 6% coupon is currently trading at a price of 95 (a discount). Compared with the coupon rate, the bond's current yield and yield to maturity will be:
- An investor buys a $1,000 par bond with a 5% coupon at a price of 80. What is the current yield?
- Which statement about the relationship between bond prices and interest rates is correct?
- An investor in the 32% federal tax bracket is comparing a 4% municipal bond with a taxable corporate bond. What taxable-equivalent yield must the corporate bond offer to match the municipal?
- A general obligation (GO) municipal bond is backed primarily by:
- A revenue bond issued to finance a municipal water and sewer system is repaid from:
Última revisión: · proceso editorial
Equipo Editorial de PrepPass · Verificado con FINRA Series 7 General Securities Representative Exam · Cómo revisamos