The Difference Between a General Obligation and a Revenue Bond

question 17

Multiple Choice

The difference between a general obligation and a revenue bond is:

• A)the general obligation bond is backed by the full faith, credit, and "taxing power" of the governmental unit.
• B)that for a revenue bond, the repayment of the issue is fully dependent on the revenue-generating capability of a specific project or venture.
• C)that general obligation bonds are usually of high quality because of the taxing power behind most of them.
• D)All of the above

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Definitions:

Withdraw

The act of removing funds from a bank account, or discontinuing participation in an activity or agreement.

Simple Interest

Interest calculated on the principal portion of a loan or deposit, not compounding on earned interest.

Savings Account

An account at a banking institution, offering the preservation of the initial amount with a low interest return.

Deposit Today

The action of placing money into a financial account with the intention that it starts earning interest or grows in value from today onwards.