Series 7 Exam Question 41: Answer and Explanation

Question: 41

An IDR is

• A. backed by charges on the benefited property
• B. backed by a private user
• C. backed by excise taxes
• D. a bond that requires legislative approval

Correct Answer: D

Explanation:

D. An IDR (Industrial Development Revenue Bond) is issued for the construction of a facility for the benefit of a private user. As such, the bonds are backed by lease payments made by that private user (typically a corporation).