SERIES 7 TUTORING TIPS - MUNICIPAL BONDS

The interest on almost all municipal bonds is exempt from federal tax.  However, there are two types of municipal bonds that could be classified as taxable municipal bonds.  Can you name these two types of municipal bonds?  If you are not familiar with these two types of municipal bonds, you should consider working with a Series 7 Tutor.  Try the following series 7 question:  Which two of the following municipal bonds would NOT be exempt from federal tax?

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I. A general obligation bond issued by the state of Texas

II. A revenue bond issued to build a sewer system

III. A Build America Bond

IV. An industrial development revenue bond

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A. I and II

B. I and III

C. II and IV

D. III and IV

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