SIE practice questioneasyMunicipal Bonds - GO vs. Revenue
Which type of municipal bond is backed by the full faith and credit of the issuing municipality, including its taxing power?
- AIndustrial development bond
- BRevenue bond
- CGeneral obligation bond✓ Correct answer
- DTax anticipation note
Explanation
Why C — General obligation bond
General obligation (GO) bonds are backed by the taxing power of the issuer. Revenue bonds are backed by project revenues, industrial development bonds by lease payments, and TANs by future tax receipts.
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