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Bonds 208: General Obligation Bonds

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1.
All of the following might be funded with general obligation bonds except _______.
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A pay parking ramp. This would generate revenue from user fees and would more likely be funded with revenue bonds than GO bonds.
2.
Most general obligation bonds are purchased directly from municipalities.
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False. Most general obligation bonds are purchased on the secondary market.
3.
Which of the following is an example of an ad valorem tax?
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Property tax. This is an example of an ad valorem tax, a tax levy based on the value of property or real estate.
4.
General obligation bonds can be effective investments for those who seek a high degree of safety from their investments.
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True. General obligation bonds are typically highly rated for their low default risk.
5.
General obligation bonds are typically considered a safe investment because ________.
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Municipalities can raise taxes to avoid default. This typically gives them high credit ratings.