Consider a municipal bond issue that has been defeased. Which of the following statements is NOT true?

Consider a municipal bond issue that has been defeased. Which of the following statements is NOT true?



A) The marketability of the issue increases.

B) The issue is now backed by U.S. government securities.

C) The issue is no longer considered part of the issuer's outstanding debt.

D) The rating on the issue decreases.



Answer: D) The rating on the issue decreases.


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