5. Capital market instruments: Municipal bonds Municipal bonds supported by state or local government tax revenue from a broad variety of sources are called: General obligation bonds Revenue bonds Separate Trading of Registered Interest and Principal of Securities Treasury inflation-Protected Securities Which of the following are characteristics of municipal bonds? Check all that apply. They do not pay a risk premium because state and local governments will not default on their debt obligations. The interest income earned from them is not exempt from federal taxes. Their yield is commonly 2030% less than the yleld offered on Treasury securities with similar maturities. They are less liquid than Treasury securities and, as a result, pay a slight premlum