SIE practice questionmediumMunicipal Bonds
A city issues a bond to finance the construction of a toll bridge, with principal and interest payable solely from toll collections. What type of bond is this?
- AMoral obligation bond
- BGeneral obligation bond
- CSpecial tax bond
- DRevenue bond✓ Correct answer
Explanation
Why D — Revenue bond
Revenue bonds are repaid from project revenues. GO bonds are backed by taxes; special tax bonds by designated taxes, and moral obligation bonds by non-binding government pledges.
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