Which One of the Following Statements Is True in Regards

question 74

Multiple Choice

Which one of the following statements is true in regards to municipal bond insurance?

• A) The insurance premium is paid by the bondholders.
• B) The insurance can be cancelled with 30 days notice to the bond issuer.
• C) The financial strength of the bond issuer can affect the bond's credit rating.
• D) Insured bonds tend to sell at lower prices than uninsured bonds.
• E) To date, bond insurers have not had to pay any payments for bond defaults.

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Definitions:

Recognized Loss

A loss on an investment that has been sold for less than its purchase price, which can be used to offset capital gains for tax purposes.

Publicly Traded

Refers to companies whose shares are bought and sold by the public on stock exchanges.

Basis

The amount of investment in a property for tax purposes, used to calculate gain or loss on the sale or other disposition of the property.

Condemnation Proceeds

Financial compensation received when property is taken by a government authority through eminent domain.