SIE practice questionhardMunicipal Bonds - GO vs. Revenue
A major difference between GO and revenue municipal bonds is:
- ARevenue bonds are always safer
- BGO bonds are backed by taxing power; revenue bonds by project income✓ Correct answer
- CGO bonds pay higher interest rates
- DRevenue bonds are federally guaranteed
Explanation
Why B — GO bonds are backed by taxing power; revenue bonds by project income
GO bonds rely on taxes; revenue bonds on project earnings. Revenue bonds are not always safer, do not guarantee higher rates, nor have federal backing.
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