Question

Q. Which of the statements given below with regards to Municipal bonds are correct?

Select the correct answer using the codes given below:

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

The correct option is B 2 only

Explanation:

• Statement 1 is incorrect. Bangalore Municipal Corporation was the first municipal body in India to issue municipal bonds in 1997.
• Statement 2 is correct. The public issue of a municipal bond can only happen if it is rated above investment grade.