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Unformatted text preview: mortgage crisis of 2009 sharp drops in property valuations have led to state and local finance constraints, potentially leading to municipal defaults. An example of the low risk of municipal bonds is California that states in its state constitution that bondholders come only second to primary education to be paid from tax receipts. One of the main problems surpassing the fear of defaults is the fact of what happens if an investor wants to sell the bonds before the maturity date? Given the current financial climate of most states its difficult to sell bonds close to even their original price. The market for munis is on the up and up, experts believe that the market is taking a signal from California and pricing the bonds as if there are more likely to default than they are....
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- Spring '11