SIE practice questionmediumRevenue bonds
A city issues a bond to build a new toll bridge. Debt service will be paid solely from the tolls collected. This bond is classified as a:
- ARevenue bond✓ Correct answer
- BGeneral obligation bond
- CIndustrial development bond
- DSpecial tax bond
Explanation
Why A — Revenue bond
Revenue bonds are repaid from the revenue generated by the project they fund. GO bonds are backed by taxes, not project revenue, while industrial development bonds and special tax bonds have different structures.
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