Which of the Following Fund Types Is Most Likely to Have

question 15

Multiple Choice

Which of the following fund types is most likely to have a legally adopted annual budget?

• A) Permanent fund.
• B) General Fund.
• C) Pension trust fund.
• D) Capital projects fund.

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Definitions:

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.

Strip Bond

A type of bond where the principal and regular coupon payments have been separated and are sold individually as zero-coupon bonds.

Interest

The cost of borrowing money, typically expressed as a percentage of the borrowed amount, paid by the borrower to the lender.