Series 7 Exam Prep 29, Municipal Bond Basics
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
In this episode you will learn:
- The fundamental difference between General Obligation (GO) bonds backed by taxes and Revenue bonds backed by project-specific income.
- Why GO bonds require voter approval and are subject to debt limits, while Revenue bonds typically are not.
- That the primary benefit of municipal bonds is federally tax-exempt interest, which is most suitable for investors in high tax brackets.
- How to calculate the taxable equivalent yield to compare municipal bonds with taxable corporate bonds.
- Key exam traps like Industrial Development Revenue (IDR) bonds, whose interest may be subject to the Alternative Minimum Tax (AMT).