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Bonds 209: Revenue Bonds

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1.
A city wishing to build a toll road would finance it with a revenue bond rather than a general obligation bond.
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True. Revenue bonds fund facilities that produce revenues, such as tolls.
2.
The New Housing Authority issues bonds for ________.
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Low-income housing. The New Housing Authority builds low-income housing and finances it partly through revenue bonds.
3.
Revenue bondholders are the first to receive a municipal project's earnings.
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False. Operations expenses are paid first. Revenue bondholders are paid next.
4.
Revenue bonds that include backing by a municipality's credit are called _______.
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Double-barreled bonds. They receive collateral from a double source; thus the name.
5.
Revenue bonds pay more interest than general obligation bonds because their revenue-producing abilities cannot be predicted with certainty.
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True. To compensate, revenue bonds offer higher interest.