TAILIEUCHUNG - Bond markets analysis and strategies 4th edition_6

Tham khảo tài liệu 'bond markets analysis and strategies 4th edition_6', tài chính - ngân hàng, đầu tư chứng khoán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | M IBM . JS. 196 CHAPTER 8 Municipal Securities ras5 the same qualitative risks as investing in corporate bonds with the additional risk that a change in the tax law may affect the price of municipal securities adversely. Because of the tax-exempt feature yields on municipal securities are lower than those on comparably rated taxable securities. Within the municipal bond market there are quality spreads and maturity spread. Typically the municipal yield curve is upward sloping. Moreover there are yield spreads related to differences between instate issues and general market issues. Questions 1. Explain why you agree or disagree with the following statements a. All municipal bonds are exempt from federal income taxes. b. All municipal bonds are exempt from state and local taxes. 2. If Congress changes the tax law so as to increase marginal tax rates what will happen to the price of municipal bonds 3. Why would a property and casualty insurance company shift its allocation of funds from corporate bonds to municipal bonds 4. What is the difference between a general obligation bond and a revenue bond 5. Which type of municipal bond would an investor analyze using an approach similar to that for analyzing a corporate bond 6. a. In a revenue bond which fund has priority when funds are disbursed from the re- serve fund the operation and maintenance fund or the debt service reserve fund b. In a revenue bond what is a catastrophe call provision 7. What is the tax risk associated with investing in a municipal bond 8. An insured municipal bond is safer than an uninsured municipal bond. Indicate whether you agree or disagree with this statement. 9. In your view would the typical AAA- or AA-rated municipal bond be insured 10. Explain the different types of refunded bonds. 11. Give two reasons why an issuing municipality would want to refund an outstanding bond issue. 12. a. What are the three basic types of bank support for a bank-backed municipal security b. Which is the .

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