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Interest rate risk is one of the key threats to municipal bond investors.. When interest rates rise, the market value of existing bonds tends to decrease. When interest rates rise, the market ...
Municipal bonds, or "munis," are popular investments for a few reasons. Most notably, as a government bond, they can be the closest thing to a safe asset that the market offers. And, investors ...
Municipal bonds offer tax advantages and lower credit risk. Corporate bonds, on the other hand, may provide higher yields but come with […] The post Municipal Bonds vs. Corporate Bonds appeared ...
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.
A risk-free bond is a theoretical bond that repays interest and principal with absolute certainty. The rate of return would be the risk-free interest rate. It is primary security, which pays off 1 unit no matter state of economy is realized at time +. So its payoff is the same regardless of what state occurs.
The Delaware National High-Yield Municipal Bond Fund invests in medium and lower-grade municipal bonds to generate a high level of current income that is exempt from federal income tax.
That perception could thus potentially allow a local government to borrow at a lower interest rate, saving its taxpayers' money over the life of the bonds. Despite that advantage, many states, such as California under Proposition 13 , do not allow local governments to issue unlimited-tax general obligation debt without a public vote .
Investors who have held onto long-term bonds throughout the past few years might finally have their chance at seeing gains in a lower interest rate environment. Rate cuts by the Federal Reserve ...
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