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Municipal bonds are especially attractive to investors in higher tax brackets because their interest income is exempt from federal taxation, and in many cases, also from state and local taxes if the investor resides in the issuing jurisdiction. This exemption effectively boosts the after-tax yield relative to taxable securities. Option A is misleading—while municipals often have lower nominal yields than Treasuries or corporates, the tax benefit can make them superior on an after-tax basis. Option C, call risk, is a disadvantage, not a benefit, as issuers may redeem bonds early when rates decline. Option D is incorrect because municipal bonds generally have lower historical default rates than comparably rated corporate bonds. Series 65 requires candidates to calculate and compare tax-equivalent yields and understand how tax status influences suitability. Advisers must ensure high-income clients are aware of both benefits (tax treatment) and risks (credit, call, market) when allocating to municipal securities.