Practice Quiz

Financial Planner

Category - Investment Planning

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Some bonds are issued to purchase specific fixed assets, some are promissory notes, still others are sold with no coupon at a discount; what type of bonds are debt obligations issued by state and local government?
  1. Series EE Bonds
  2. Municipal Bonds
  3. Asset-backed Securities
  4. Mortgage pass-through Securities
Explanation
Answer: B - Municipal bonds are issued by state and local governments. These are general obligation bonds that are backed by the full faith and credit of the government unit. The revenue gained is by the specific project financed by the bond issue.
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