Which of the following statement(s) is (are) false regarding municipal bonds?

I) A municipal bond is a debt obligation issued by state or local governments.

II) A municipal bond is a risk free security issued by US Treasury

III) The interest income from a New York municipal bond is exempt from federal income taxation as well as state taxes for a tax payer filing taxes in Massachusetts.

IV) Municipal bonds as an investment is most favored by individuals in high income tax bracket