Final answer:
A double barreled security is a type of municipal bond that can be repaid using revenues from a specific project or through the general taxing power of the municipal government (d).
Step-by-step explanation:
A double barreled security is a municipal security that can be paid from the revenues of a project and is a general obligation of a municipal government. This means that the funds necessary to pay back the bondholders can come from a specific project's revenues, like a toll bridge or a public utility, and if those funds are insufficient, the municipality has the authority to use its taxing power to raise the necessary funds. These securities provide an additional layer of security to bondholders, as they have two sources of repayment.
Municipal bonds are typically exempt from federal income tax and may also be exempt from state and local taxes, especially if they are issued within the state where the investor resides. This tax benefit is a major reason why investors may choose to purchase municipal bonds.