SIE Exam Question 467: Answer and Explanation

Question: 467

The city of Miami is seeking to raise $10 million through the sale of general obligation bonds to repair the high school's football field. The bonds are going to be issued ex-legal. Which of the following is correct?

• A. The bonds' legal claim to the tax revenue is in doubt.
• B. The bonds received no legal opinion.
• C. The bonds received a qualified legal opinion.
• D. The bonds received an unqualified legal opinion.

Correct Answer: B

Explanation:

B: This is a very small bond issue. As such it would not make sense in many cases to pay substantial legal fees to obtain a legal opinion. These bonds are said to be ex-legal because no legal opinion was ever obtained.