Final answer:
The inaccurate statement about municipal bonds is that their yield to maturity is generally lower than that of corporate bonds with similar risk, which is not true. Municipal bonds typically offer lower yields due to their tax-exempt status, making them appealing despite a lower yield.
Step-by-step explanation:
The statement that is not accurate regarding municipal bonds is that 'The yield to maturity is generally lower than corporate bonds with similar risk.' This is not accurate because municipal bonds typically offer lower yields compared to corporate bonds of similar risk due to their tax-exempt status, which makes them attractive despite their lower yield. Corporate bonds generally have higher yields to compensate for the higher risk and the fact that their interest is subject to taxation.
Municipal bonds, on the other hand, have a very low default risk, and their interest income might be tax-exempt, which can be significant advantages. Furthermore, municipal bonds can indeed be issued for projects such as the construction of hospitals, which is entirely accurate.