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An investor seeking relatively low default risk investments combined with some type of favorable tax treatment...

An investor seeking relatively low default risk investments combined with some type of favorable tax treatment and inflation protection should consider which of the following?(1) Insured municipal bonds. (2) TIPS. (3) Zero coupon Treasury bonds. (4) Series I savings bonds. (5) Series HH savings bonds.

a. 1, 2 and 3.

b. 1, 2 and 4.

c. 2 and 4.

d. 2, 4 and 5.

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Answer #1

Option a,1, 2 and 4.

Insured municipal bonds as the name suggests are insured against default.

TIPS are Treasury Inflation protected securities which protect against inflation and are zero coupon yield bonds.

Series I bonds adjust against inflation and are tax free.

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