Asked by Saanvi Patel on Jun 05, 2024
Verified
Two types of municipal bonds exist.What are they?
A) Government bonds and mortgage pass-through security bonds
B) Corporate bonds and general obligation bonds
C) Revenue bonds and government bonds
D) Revenue bonds and general obligation bonds
Municipal Bonds
Bonds issued by state and local governments.
Revenue Bonds
Bonds issued by governments or municipalities that are intended to be repaid with revenue from a specific project or source, such as a toll road or public utility.
General Obligation Bonds
Long-term loans issued by municipalities that are backed by the general tax revenue of the municipality rather than revenue from a specific project.
- Distinguish between types of bonds, focusing on municipal bonds.
Verified Answer
AD
Alyson DiamondJun 06, 2024
Final Answer :
D
Explanation :
Municipal bonds are primarily categorized into two types: revenue bonds and general obligation bonds. Revenue bonds are secured by specific revenue sources, such as tolls from a bridge, while general obligation bonds are backed by the full faith and credit of the issuing municipality.
Learning Objectives
- Distinguish between types of bonds, focusing on municipal bonds.