SIE practice questioneasyMunicipal Bonds
An investor looking for income exempt from federal income tax should consider which type of security?
- AMunicipal bond✓ Correct answer
- BCorporate bond
- CTreasury bond
- DPreferred stock
Explanation
Why A — Municipal bond
Municipal bond interest is generally exempt from federal tax. Corporate bonds, Treasuries, and preferred stocks are subject to federal tax.
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