Question

What

is the most likely reason an investor in one state would buy local government bonds in another state?
A. The investor would become part owner of the project.
B. The investor would not have to pay federal taxes on bond interest.
C. The investor would be helping to fund a community project.
D. The investor would be able to collect assessments on the project.

Answer 1

The most likely reason an investor in one state would buy local government bonds in another state is to avoid paying federal taxes on bond interest.

Step-by-step explanation:

An investor in one state might buy local government bonds in another state for several reasons. However, the most likely reason is option B - The investor would not have to pay federal taxes on bond interest. By investing in bonds issued by another state's local government, the investor can take advantage of tax benefits. The interest earned from these bonds is exempt from federal taxes, allowing the investor to potentially save money on their overall tax liability.

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