The correct answer is A. municipal bonds.
Municipal bonds are bonds issued by local and state governments. They are considered to be relatively safe investments, as the government has the power to tax its citizens to repay the bonds. However, there is always some risk of default, as seen in the case of the city of Detroit, which filed for bankruptcy in 2013.
Corporation bonds are bonds issued by corporations. They are considered to be riskier investments than municipal bonds, as corporations do not have the same power to tax their citizens to repay the bonds. However, they also offer the potential for higher returns.
Default bonds are bonds that have defaulted on their payments. This means that the issuer of the bond has failed to make the required interest payments or repay the principal amount of the bond. Default bonds are considered to be very risky investments, and they are often sold at a discount to their face value.
Zero bonds are bonds that do not pay interest. Instead, they are issued at a discount to their face value, and the investor receives the full face value of the bond at maturity. Zero bonds are considered to be relatively safe investments, as they do not have any interest payments that could be missed.