Which of the following is considered a form of tax-free investment?

Tax-exempt bonds are indeed considered a form of tax-free investment because the interest income they generate is not subject to federal income tax and often state taxes as well, depending on the bond's origin and the investor's residency. This feature allows investors to retain more of their earnings compared to taxable bonds, making tax-exempt bonds particularly appealing to individuals in higher income tax brackets.

Registered accounts, such as IRAs or 401(k) plans, provide tax advantages but are not entirely tax-free; taxes are deferred until funds are withdrawn. High-turnover mutual funds generally incur capital gains taxes on realized gains, and irrevocable trusts can have complex tax implications, making them less straightforward as tax-free investments. Thus, tax-exempt bonds stand out as a clearly defined form of investment that offers significant tax benefits to investors.