SIE Exam Question 498: Answer and Explanation

Question: 498

The state of Massachusetts is seeking to raise $300 million through the sale of revenue bonds to repair the roadways. Which of the following is correct?

• A. The underwriters will be required to submit sealed bids.
• B. The offering will be advertised in the daily bond buyer.
• C. These bonds will be issued through a negotiation.
• D. These bonds will be subject to a statutory debt limit.

Correct Answer: C

Explanation:

C: Revenue bonds are issued through a negotiated underwriting process. The issuer will select the underwriter they would like to have offer the bonds and negotiate the terms with the underwriter directly.