Series 10 Exam Question 55: Answer and Explanation

Question: 55

You have purchased municipal bonds whose proceeds have been used to build a new school in your town. The bonds are trading ex legal. What is the most likely reason for this?

• A. The bonds are illegal.
• B. The legal opinion is in doubt.
• C. No legal opinion was obtained.
• D. The legal opinion was lost.

Correct Answer: C

Explanation:

Many small municipal issues never get a legal opinion because the issue is too small to justify the cost.