Series 7 practice questioneasyDebt Securities 78
Which municipal bond is backed primarily by the taxing power of the issuer?
- AA revenue bond
- BAn industrial development bond backed only by project revenue
- CA collateral trust note
- DA general obligation bond✓ Correct answer
Explanation
Why D — A general obligation bond
General obligation bonds are supported by the issuer’s ad valorem or other taxing power. Revenue bonds depend mainly on revenues from a project or facility.
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