The interest paid on a municipal bond, otherwise known as a muni, is generally exempt from federal income taxes. therefore, the

Question

Luba_88 [7]

3 years ago

6

The interest paid on a municipal bond, otherwise known as a muni, is generally exempt from federal income taxes. therefore, the

coupon rate on these bonds is considerably lower than a corporate bond of equivalent risk. true or false?

Business

1 answer:

Ratling [72] · Answer 1 · 2021-12-13T23:24:32+03:00

That statement is true
A corporate Bond is way more senstive to the condition of the market which will affect the volatility of its value. Since government could technically produce their money from the federal reserve, the municipal bond is technically will always be paid (by risking inflation)