: An individual buys a municipal bond for an airport improvementproject. The individual usually buys a municipal bond from a bond dealer, or aninvestment banker marketing the bond, and the funds from the sale of the bond aredelivered to the city minus a fee from the investment banker. The city uses the fundsto build new facilities at the airport, for example a new parking lot. Once finished thefees received from parking are used to payback the buyer of the bond with interest.

1) In this example cycle of money, the benefit for the lender ?

a) the money raised by the bond can be used to fund a municipal project

b)the interest earned on the bond can be usedto purchase consumer goods or be reinvested

2) For the bond dealer, The benefit is?

a)the fees collected on the transaction are part of the firms revenue

b) money raised from selling the bond can be used to py off the bond holder

3)For the city the benefit is?

a) the ability to build new facilities and provide services for the community

b) the insurance of the bond improvesthe city dept rating