SIE (Securities Industry Essentials) Practice Exam

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What document is given to an investor who purchases a municipal bond?

Bond indenture
Prospectus
Official statement
Trustee report

The correct answer is: Official statement

An official statement is the correct document that is given to an investor who purchases a municipal bond. This document provides important information about the bond, such as the issuer's financial statements, the bond's interest rate, maturity date, and any potential risks associated with the bond. A bond indenture (choice A) is a legal document outlining the terms and conditions of the bond, not one that is given to the investor. A prospectus (choice B) is a document used for registration statements for stocks, not bonds. A trustee report (choice D) is a report provided by the trustee who oversees the bond to ensure that the issuer is meeting its obligations, but it is not the document given to the investor. Overall, the official statement contains the most relevant and important information for an investor looking to understand and assess the risks associated with the municipal bond they are interested in purchasing.