SIE Exam Question 336: Answer and Explanation

Question: 336

Bonds that are issued by state and local governments but benefit a private corporate are

• A. industrial revenue bonds.
• B. double-barreled bonds.
• C. moral obligation bonds.
• D. special assessment bonds.

Correct Answer: A

Explanation:

A - Industrial development bonds are issued by governments for the benefit of private corporations. Revenue streams raised by the facilities pay principal and interest. They are a form of conduit bond. Projects funded by IDRs include parking garages, factories, industrial parks, and sports stadiums.