SIE Exam Question 46: Answer and Explanation

Question: 46

__________ are municipal bonds backed by the revenue-generating capacity of the issuer.

• A. Revenue bonds
• B. General obligation bonds
• C. Agency bonds
• D. Treasury notes

Correct Answer: A

Explanation:

Revenue bonds are municipal bonds backed by the revenue-generating capacity of the issuer. Municipal bonds backed by the full faith and credit, and taxing power, of the issuer are called general obligation bonds. Agency bonds are issued by either an agency of the US government (other than the Treasury) or a government-sponsored enterprise (GSE) and may not be fully guaranteed. Treasury notes are bonds issued by the US Treasury and are backed by the full faith and credit of the US government.