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InstructionMultiple Choice

Buying Bonds

Question 2 • ****Spring 2026 Financial Math - MA2007 MQS21QXV

Which kind of bond pays interest which is exempt from tax?

Answer
A
Treasury Bonds
B
Junk Bonds
C
Municipal Bonds
D
Corporate Bonds

Explanation

Municipal bonds are issued by state and local governments, and their interest is generally exempt from federal income tax. Depending on where you live and where the bond was issued, the interest may also be exempt from state or local taxes. Treasury, junk, and corporate bond interest is generally taxable.

AI-written and checked against the verified answer.

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