What is the optimal underwriting strategy for a municipal bond?

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Municipal bonds are debt securities issued by state or local governments to finance public projects, such as schools, roads, or hospitals. They offer tax advantages to investors, as the interest income is usually exempt from federal and sometimes state and local income taxes. However, issuing municipal bonds also involves costs and risks for the issuers, such as interest payments, fees, and default risk. Therefore, choosing the optimal underwriting strategy for a municipal bond is a crucial decision that affects the issuer's financial performance and reputation.

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