Products & Their RisksQuestion 98 of 398
A revenue bond is distinguished from a general obligation bond because a revenue bond is repaid from:
a.Ad valorem property taxes levied by the city
b.The state's general fund appropriations
c.A federal subsidy tied to inflation
d.The income generated by the specific project or facility it finances
Explanation
A revenue bond is serviced solely by the revenue produced by the facility it finances, such as a toll road, airport, or utility. Because repayment depends on that project's income rather than the issuer's taxing power, revenue bonds are generally considered somewhat riskier than GO bonds and do not usually require voter approval.
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