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A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
Callable bonds are a type of bond that the issuer can “call” or redeem before the maturity date. The specifics vary from bond to bond, but callable bonds always have one thing in common ...
Some municipal bonds are callable, meaning the issuer can repay the bond before its maturity date. ... An emergency fund should be liquid -- in an account that isn't at risk of significant ...
A general obligation bond is a common type of municipal bond in the United States that is secured by a state or local government's pledge to use legally-available resources, including tax revenues, to repay bondholders.
For municipal bonds purchased at a discount, the de minimis tax rule determines whether the bond’s appreciation at maturity will be taxed at ordinary income or capital gains rates. The de ...
A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt. In North America and elsewhere where it is common for government entities and private corporations to raise funds through the issue of bonds , the term is normally used in ...
How Muni Bonds Work Municipal bonds look a lot like other kinds of bonds. State and local governments issue muni bonds in order to finance a variety of public projects, ranging from general budget ...
By issuing numerous callable bonds, they have a natural hedge, as they can then call their own issues and refinance at a lower rate. The price behaviour of a callable bond is the opposite of that of puttable bond. Since call option and put option are not mutually exclusive, a bond may have both options embedded. [3]
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