Municipal Bonds: Local Government Securities
IN THIS CHAPTER
Understanding municipal bond basics
Comparing general obligation bonds to revenue bonds
Reviewing other types of municipal bonds
Recognizing sources of municipal bond information
Municipal bonds are securities that state governments, local governments, or U.S. territories issue. The municipality uses the money it borrows from investors to fund and support projects, such as roads, sewer systems, hospitals, and so on.
Even though you’re most likely going to spend a majority of your time selling equity securities (stocks), for some unknown reason, the SIE and some of the co-requisite exams such as the Series 7, test heavily on municipal securities. If you’ve flipped ahead, you may have noticed that this chapter isn’t one of the biggest in the book. Why is that? Well, I cover a lot of the bond basics, such as par value, maturity, types of maturities (term, serial, and balloon), and so on, in Chapter 7. Also, you can find some of the underwriting information in Chapter 5.
In this chapter, I cover the SIE exam topics ...