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1.
All of the following are examples of taxes that municipalities may use to pay general obligation bondholders, except _______.
User fees. User fees are not an example of the kind of taxes municipalities use to pay bondholders.
2.
Which of the following is an example of an ad valorem tax?
Property tax. This is an example of an ad valorem tax, a tax levy based on the value of property or real estate.
3.
All of the following are ways to make a $1,000 investment in general obligation bonds except _______.
Brokers. Brokers typically require minimums of greater than $5,000 to purchase general obligation bonds. The other options are general obligation bond pools that provide a much lower buy-in price.
4.
The principal difference between general obligation bonds and revenue bonds is that _______.
The two are backed by different kinds of collateral. General obligation bonds are backed by full faith and credit, and revenue bonds are backed by project revenue.
5.
The tax status of general obligation municipal bonds makes them an undesirable investment for individuals in the higher tax brackets.
False. The tax-free status of general obligation municipal bond interest makes these bonds desirable for those in the higher tax brackets.
