The interest paid on any municipal bond is: A)free of default risk. B)subject to default risk and is exempt from state income taxation. C)free of...

The interest paid on any municipal bond is:

A)free of default risk.

B)subject to default risk and is exempt from state income taxation.

C)free of both default risk and federal income taxation.

D)exempt from federal income taxation and may or may not be exempt from state taxation.

E)taxable at the federal level and tax exempt at the state and local level.