Explain the type of general obligation bond

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Question: How's a corporate bond compare to a municipal bond? There are two main categories of municipal bonds: general obligation bonds and revenue bonds. Generally, general obligation bonds are consider less risky than revenue bonds since the latter are project specific where as the former, depending on the type of general obligation bond, can tap into the full taxing power of potentially an entire state. Investors in high-tax brackets tend to invest in municipal bonds because the interest is typically not taxable at the federal level. Do corporate bonds face default risk?

Reference no: EM131793317

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