Because many people know that interest payments on municipal debt generally are exempt from taxation by the federal government, they would undoubtedly be surprised by the term tax risk of investing in municipal bonds. Can you explain this term and state why an astute investor should always be aware of this risk when buying municipal bonds?

Answer rating: 100% (QA)

i Municipal bonds are tax free and hence a lot of investors prefer these bonds since they dont have ... View the full answer