SIE practice questionmediumMunicipal Bonds - GO vs Revenue
A city issues bonds backed by the taxing power of the municipality. What type of bond is this?
- ARevenue bond
- BGeneral obligation bond✓ Correct answer
- CCorporate bond
- DAgency bond
Explanation
Why B — General obligation bond
General obligation (GO) bonds are backed by the full faith, credit, and taxing power of the issuer. Revenue bonds are secured by specific project revenues, agencies issue agency bonds, and corporations issue corporate bonds.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Debt Securities questions
- Which U.S. Treasury security has maturities ranging from 2 to 10 years and pays semiannual interest?
- Which of the following is a feature commonly associated with corporate bonds?
- Which of the following is NOT a government-sponsored enterprise (GSE) that issues agency bonds?
- Interest rate risk is the risk that: