DETERMINANTS OF MUNICIPAL BOND YIELDS.

This article presents information on the determinants of municipal bond yields. The author examines the determinants of the structure of municipal bond yields and provides empirical evidence from tests that were conducted to measure the impact of these factors on the yields. The author is interested in understanding why the yields from one state may be different from another state's bond yields. The findings indicate that bond yields are a result of the bond's default risk and marketability. The author discusses the situations where each of these factors plays the more significant role.