Final answer:
True. Municipal bonds, also known as munis, are generally considered to be a safe investment because they are issued by local governments and backed by taxes.
Step-by-step explanation:
Municipal bonds, also known as munis, are generally considered to be a safe investment.
These bonds are issued by local governments to finance public projects such as schools, highways, and water systems.
Investors who purchase municipal bonds are essentially lending money to the government, and in return, they receive regular interest payments and the repayment of the principal when the bond matures.
Municipal bonds are considered safe because the government has a reliable source of income through taxes to make the interest and principal payments.
However, it's important to note that the safety of municipal bonds can vary depending on the creditworthiness of the issuing government.