Series 7 Exam Question 37: Answer and Explanation

Question: 37

Which of the following municipal securities could have a rating of MIG 2?

I. PN

II. Tax exempt commercial paper

III. TRAN

IV. IDR

• A. I and III
• B. I, II and III
• C. I, III and IV
• D. II, III, and IV

Correct Answer: B

Explanation:

B. "MIG" (Moody's Investment Grade) ratings are for municipal notes (short-term municipal securities). Municipal notes include TANs, RANs, TRANs, GANs, BANs, CLNs, PNs, and tax-exempt commercial paper. IDRs (Industrial Development Revenue bonds) are long-term debt securities issued by a municipality backed by a private user.