A debt security issued by a state or local government is known as a:

Understand the Problem

The question is asking to identify the correct term for a debt security that is issued by a state or local government, providing multiple-choice options to choose from.

More Information

Municipal bonds are issued by state and local governments for public projects like schools and highways. They are often viewed as a safe investment and can offer tax-exempt income.

Tips

A common mistake is confusing municipal bonds with treasury bonds, which are issued by the federal government.

Sources

• Municipal Bond: Definition, Types, Risks, and Tax Benefits - investopedia.com
• Municipal Bond Basics - msrb.org
• What are Municipal Bonds - SEC.gov - sec.gov