THE COST OF INEFFICIENT COUPONS ON MUNICIPAL BONDS.

The article reports on the costliness of inefficient coupons on municipal bonds. Capitalists and financiers buy more municipal bonds which sell close to their par value which is the lowest yield but with a coupon enabling its sale near par value. Also, investors try to make the marginal utility per dollar that is invested in each bond equal. However, coupon payments on municipal bonds are costly to the investor as opposed to U.S. Treasury or corporate bonds.