Definition of Tax Exempt Bond Fund

Tax Exempt Bond Fund is a bond fund that seeks to produce investment income which is free from federal tax by investing in a portfolio of municipal bonds.

Applying "Tax Exempt Bond Fund" to Securities Exams:

Investors who are seeking tax free income may elect to invest in a tax free municipal bond fund. The bond fund will purchase a large number of municipal bonds of various maturities and distribute the interest payments received to investors in the form of dividends.

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