Products & Their RisksQuestion 126 of 398
The debt service on a municipal revenue bond is paid from:
a.Ad valorem property taxes levied by the issuer
b.The general fund of the state legislature
c.The income produced by the specific project or facility that the bond financed
d.Federal grants earmarked for the issuer
Explanation
A revenue bond is self-supporting: it is repaid solely from the revenue (user fees, tolls, or charges) generated by the facility it financed, such as an airport, toll bridge, or utility. Because repayment depends on that project's success rather than broad taxing power, revenue bonds typically carry somewhat more credit risk than GO bonds.
Practice all 398 questions free — no signup required.
Related questions on this topic
- A 'bank-qualified' municipal bond is one that:
- A 529 college savings plan offers which key federal tax benefit?
- An ABLE account is designed primarily to:
- Which agency mortgage security is backed by the full faith and credit of the U.S. government?
- Fannie Mae (FNMA) is best described as a:
- Freddie Mac (FHLMC) primarily:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Securities Industry Essentials (SIE) Exam · How we review