Series 63 practice questionmediumMunicipal Securities
Which municipal-style obligation is NOT automatically exempt from registration under the USA?
- AA general-obligation bond issued by a city in State M
- BA revenue bond issued by a city in State N
- CA bond issued by State M’s highway authority
- DAn industrial revenue bond whose payments are derived from a private commercial enterprise✓ Correct answer
Explanation
Why D — An industrial revenue bond whose payments are derived from a private commercial enterprise
Obligations of U.S. states, political subdivisions, and public authorities are generally exempt. The USA governmental exemption excludes an industrial revenue obligation when payments are derived from a nongovernmental industrial or commercial enterprise, unless another exemption applies.
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