SIE Understanding Products and Their Risks Question 16: Answer and Explanation

Question: 16

Which of the following is considered a municipal fund security?

• A. College savings plans (commonly known as 529 plan)
• B. Prepaid tuition plans (PTPs)
• C. Municipal revenue bond
• D. Municipal general obligation bond

Correct Answer: A

Explanation:

A: College savings plans were authorized by Section 529 of the IRS code and are considered municipal fund securities. Choice B, PTPs, are not considered to be municipal fund securities. Choices C and D are municipal securities but not municipal fund securities.