QUESTION 3

Which of the following is a less likely to be a characteristic of Municipal Bonds?

A- Interest payment (coupon) on municipal bonds is usually exempt from federal income tax, and sometimes all local taxes.

B- Municipal bonds are backed by the taxing power of the issuer

C- Municipal bonds are backeq up by the federal government.

D- Municipal bonds can be backed up by the project's revenues

QUESTION 4

Which of the following instruments can be seen as carrying the highest risk to its holder?

A- Certificate of deposit (CD)

B- Commercial paper

C- Treasury bill

D- Repurchase agreement (Repos)