SIE practice questionmediumMunicipal Revenue Bonds
Which of the following is an example of a revenue bond?
- AA corporate bond issued by a utility company
- BA bond backed by tolls collected from a highway project✓ Correct answer
- CA bond issued by a city backed by property taxes
- DA U.S. Treasury bond
Explanation
Why B — A bond backed by tolls collected from a highway project
Revenue bonds are backed by the income generated from a specific project or facility, such as toll roads, airports, hospitals, or water/sewer systems. A city bond backed by property taxes (A) is a GO bond. Treasury bonds (C) and corporate bonds (D) are not municipal securities.
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