Which of the following best defines the role of an investor in the context of municipal bonds?

The role of an investor in the context of municipal bonds is best defined as an individual or group purchasing bonds for income. Investors are the entities or people that provide capital by buying bonds, which are debt securities issued by municipalities to raise funds for various public projects, such as infrastructure, schools, or public services.

When investors purchase municipal bonds, they are essentially lending money to the issuing municipality in exchange for periodic interest payments, known as coupon payments, and the return of the principal at maturity. This relationship focuses on the investor’s objective to earn income through the interest generated by the bonds. The nature of bond investments typically appeals to individuals or groups looking for stable and often tax-exempt income, which is one of the key attractions of municipal bonds.

In contrast, entities that issue bonds are referred to as issuers, and they are responsible for creating and selling bonds to raise capital. A manager of bond funds is typically involved in overseeing and managing a portfolio of bonds on behalf of investors, which is a different specific role focused on fund management. Regulatory bodies have the responsibility of overseeing bond markets to ensure compliance with laws and regulations, which pertains to governance rather than investment. Each of these roles contributes to the overall ecosystem of municipal finance, but the investor