ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The coupon rate is the rate of interest that the company or government will pay the bondholder. The interest rate can be either fixed or floating. A floating rate might be tied to a benchmark such as the yield of the 10-year Treasury bond.

Detailed explanation-2: -Which of the following are features of municipal bonds? They are issued by state and local governments. The interest on municipal bonds is exempt from federal taxes. The interest on municipal bonds is, in some cases exempt from state taxes in the state of issue.

Detailed explanation-3: -A major benefit of municipal bonds, or “munis, ” is that the interest they pay is generally exempt from federal income taxes. They’re also generally exempt from state income taxes if the issuer is from the investor’s home state.

Detailed explanation-4: -Which TWO of the following securities are considered debt obligations of municipal governments? A revenue bond and a special tax bond are both considered debt obligations of a municipal government. A special tax bond is a type of revenue bond that is backed only by a specific tax source, such as an excise tax.