Municipal Bond

1. Based on your reading of the article, do you think the writer is bullish or bearish about Munis? Why?

Answer to the Question no. 1

The Investors believe that Municipal bonds are on a winning streak so that many investors bet will run into the new year a stock price will increase over time so it is a bullish. According to article," The supply of bonds isn’t likely to surge in 2015. A SIFMA survey of municipal-bond underwriters and dealers this month predicted issuance will reach $357.5 billion, compared with a total of $348.1 billion forecast for 2014."

Investors are flocking to municipal-bond market at a time of low interest rates there is a demand for it , there is a potential to increase. Here all the Investors plans to buy bullish on the underlying stock out fear since after the 2008 financial crash there has been a fear that there will be a further decline in stock which is was turning out to be a bearish so the stock holder don't want to invest in a risky stock , they want to invest in a stock with a sure chance of return. Despite a late-year increase in bond issuance and the prospect of the Fed raising rates, yields on municipal debt still look attractive That is, they believe that the stock price will rise and so they have paid for the right to buy the stock at a definite price known as the exercise price or strike price. The seller of a put has an obligation to buy the stock and, therefore, believes that the stock price will rise.

2. Why, according to the writer, did so many investors flock to Munis?

Answer to the Question no. 2

Investors are investing to the $3.6 trillion municipal-bond market at a time of low interest rates because after the 2008 global meltdown everybody went to panic so they want to invest on low risk investment even if the return was low. Muni is very same safe since backed by government According to article demand from individual investors, mutual funds and banks and insurance companies has remained robust,...