Series 7 - General Securities Representative Exam

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Max is an investor with an enormous amount of capital and is in the highest income tax bracket. Heis looking for an investment for his situationthat would give him tax free investment income. Which of the following securities would you MOST likely recommend?

T Bonds
A
Municipal Bonds
B
Junk Bonds
C
MLPs
D

Explanations

The interest received on municipal bonds is tax free on the federal level. T Bond interest is not taxed at the state level; however since the Federal Tax Rate is higher than any state's tax rate, Municipal bonds are a better choice for Max

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