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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.
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 ...
The revenue from that project or service pays for the bond. The interest earned on municipal bonds is exempt from federal income tax (and in some cases, state and local tax as well), making them ...
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 ...
It is an interest rate the Fed pays to banks for holding their funds at the Federal Reserve Bank. Because this offers a risk-free way to earn interest on their funds, banks do not tend to lend to each other at rates below the IORB, effectively setting a floor for the federal funds rate. [8]
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 .
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.
An auction rate security (ARS) typically refers to a debt instrument (corporate or municipal bonds) with a long-term nominal maturity for which the interest rate is regularly reset through a Dutch auction. Since February 2008, most such auctions have failed, and the auction market has been largely frozen.
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