Benefit of municipal bonds
Quantitative Finance
Level
3
Which of the following people will benefit most from buying a municipal bond?
Someone who earns more than $200K a year
Pension funds
Someone who pays 5% income tax and is buying it for his IRA
Someone who earns less than $20K a year
Someone who pays 35% income tax and is buying it for his IRA
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1 solution
The most common type of households investing in municipal bonds are wealthy individuals in high income tax brackets. They are more likely to invest in municipal bonds because of the favorable tax-exemptions on income from these securities. [http://www.municipalbonds.com/education/the-basics-of-municipal-bonds/)