What are bonds called that are issued by state and local governments and carry the risk of default?

Bonds and Bond Valuation MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Bonds and Bond Valuationfinance-mcqs › bonds-and-bond-valuation
Published
15 Jan 2019
Last updated
28 May 2026

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Explanation

Municipal bonds are debt securities issued by local and state governments and may involve some risk of default. Corporate bonds are issued by companies, defaulted bonds refer to bonds that have already failed to pay, and zero-coupon bonds are bonds sold at a discount without periodic interest payments.

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