Moving to another question will save this response tion 1 Which of the following

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Moving to another question will save this response tion 1 Which of the following statements about bonds is not true? O a. Bonds issued by the U.S. Treasury have interest that is not state income taxable. b Bonds must be held until they mature, so the investor should carefully invest in bonds that match their time horizon. O c. Bonds that can be called usually have a higher interest rate to compensate the investor for the risk that the issuer might prepay the bonds before maturity O d Interest paid and capital gains on corporate bonds are taxable by both the Federal government and the states, if the states have income taxes O e Most municipal bond interest is not taxable by the Federal income tax Moving to another question will save this response

Explanation / Answer

Option B
Bonds must be held until they mature so the investor should carefully invest in bonds that match Their time horizon.
It is not necessary to hold bonds until the maturity, the market interest rates is keep on fluctuating if investor found some better investment with better return he can sell the bonds in the open market any time before maturity.The only advantage of bond should be hold until maturity investor will not loose its principal unless bond issuer defaults.

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