Series 7 Exam Question 38: Answer and Explanation

Question: 38

Municipal bonds issued by each of the following would be triple tax free EXCEPT

• A. Puerto Rico
• B. Washington, D.C.
• C. Guam
• D. Hawaii

Correct Answer: D

Explanation:

D. U.S. territory bonds and bonds issued by federal districts are triple tax free (exempt from federal, state, and local tax). However, bonds issued by the state of Hawaii are not. The triple tax free bonds you should be aware of are the ones issued by Puerto Rico, Guam, U.S. Virgin Islands, American Samoa, and Washington, D.C.