DEBT: MUNICIPAL
All of the following callable municipal bonds are trading at an 8% basis. Which is LEAST likely to be called? A. 6 3/4% coupon rate callable at 100 in 2019 B. 7 1/2% coupon rate callable at 100 in 2019 C. 8% coupon rate callable at 100 in 2019 D. 8 3/4% coupon rate callable at 100 in 2019
A. 6 3/4% coupon rate callable at 100 in 2019
To obtain short term funds in anticipation of a subsequent long term debt financing, a municipality will issue a: A. BAN B. TAN C. RAN D. TRAN
A. BAN
When a municipal issuer defeases its debt in accordance with the terms of the bond contract, it: I terminates the lien that existing bondholders have on pledged revenues II substitutes another source of revenue acceptable to the bondholders III returns the principal amount to the bondholders at the time of the defeasance A. I and II B. I and III C. II and III D. I, II, III
A. I and II
A municipal dealer gives another municipal dealer a firm offer, good for 1 hour. This means that the dealer: I making the offer has agreed not to change the price for 1 hour II receiving the offer has agreed not to change the price for 1 hour III making the offer has agreed not to sell the bonds to someone else at the quoted price for 1 hour IV receiving the offer has agreed not to buy the bonds from someone else at the quoted price for 1 hour A. I and III B. I and IV C. II and III D. II and IV
A. I and III
The flow of funds set forth in a Trust Indenture: I is typical for revenue bonds II is typical for general obligation bonds III states the order in which collected revenues will be disbursed IV states the order in which the taxes collected will be disbursed A. I and III B. I and IV C. II and III D. II and IV
A. I and III
The ratio of net direct debt plus overlapping debt to assessed valuation is used to: I analyze general obligation bonds II analyze revenue bonds III determine the municipality's ability to generate sufficient taxes to pay for debt service requirements IV determine the municipality's ability to collect taxes assessed upon real properties in the political subdivision A. I and III B. I and IV C. II and III D. II and IV
A. I and III
Which of the following statements are TRUE regarding a municipal bond issue that is advance refunded? I The security that backs the advance refunded bonds will change after the issue is refinanced II The security that backs the advance refunded bonds will not change after the issue is refinanced III The marketability of the advance refunded bonds will increase after the issue is refinanced IV The marketability of the advance refunded bonds will decrease after the issue is refinanced A. I and III B. I and IV C. II and III D. II and IV
A. I and III
Which of the following statements are TRUE regarding municipal bonds that have been called? I Interest ceases to accrue on the bonds II Interest continues to accrue on the bonds III The holder may redeem the bonds at anytime IV The holder may only redeem the bonds on a regular semi-annual interest payment date A. I and III B. I and IV C. II and III D. II and IV
A. I and III
Municipal brokers' brokers would deal with all of the following EXCEPT: A. Individuals B. Municipal bond dealers C. Bank dealers D. Institutions
A. Individuals
Under a gross revenue pledge, bondholders have a first lien on: A. gross revenues B. gross revenues minus operations and maintenance C. gross revenues minus debt service reserve fund D. gross revenues minus deposits to the sinking fund
A. gross revenues
An analyst is reviewing the demographics of a municipality as part of a credit review for a G.O. bond issue. The analyst is reviewing: A. population trends B. assessed value trends C. collection ratio trends D. voter registration records
A. population trends
A hospital has been financed through a revenue bond issue containing a Net Revenue Pledge. Prior to paying Debt Service, all of the following expenses would be deducted by the issuer EXCEPT: A. Depreciation and amortization B. Garbage disposal costs C. Wages D. General expenses
A. Depreciation and amortization
A municipality is at its debt limit and wishes to sell additional bonds. Voter approval is required for the municipality to sell: I. General obligation bonds II. Revenue bonds III. Industrial revenue bonds A. I only B. I and II only C. II and III only D. I, II, III
A. I only
A municipal bond which is secured by taxes OTHER than ad valorem taxes is a(n): A. Special tax bond B. Industrial revenue bond C. Moral obligation bond D. General obligation bond
A. Special tax bond
All of the following statements are true regarding Construction Loan Notes ("CLNs") EXCEPT: A. When the facility is completed, the permanent financing is added to the outstanding balance ("basis") of the CLNs B. Accrued interest on CLNs is computed on an actual day month / actual day year basis C. The maturity of CLNs is generally 2 to 3 years D. The use of CLNs allows the municipal issuer to reduce its interest cost when constructing a new facility
A. When the facility is completed, the permanent financing is added to the outstanding balance ("basis") of the CLNs
Level debt service is best described as: A. debt service remains the same amount each year B. debt service decreases as the years progress C. principal repayments decrease as the years progress D. principal repayments stay the same as the years progress
A. debt service remains the same amount each year
The Bond Resolution is the contract between the- A. issuer and bondholder B. bond counsel and issuer C. bond counsel and bondholder D. issuer and Municipal Securities Rulemaking Board
A. issuer and bondholder
A "sinking fund call" is a(n): A. mandatory call B. extraordinary mandatory call C. optional call D. extraordinary optional call
A. mandatory call
Variable rate municipal notes avoid which of the following risks? A. market risk B. default risk C. marketability risk D. credit risk
A. market risk
A municipality issues a 30-year zero-coupon bond at deep discount. The bond is callable at 103. The bond is called in Year 10 when its current accreted value is $500. The bondholder will receive: A. $500 B. $515 C. $1,000 D. $1,030
B. $515 If a zero-coupon bond is called prior to maturity, it is called at the current accreted value plus any call premium specified in the bond contract. 103% of $500 = $515.
A municipality has floated a $200,000,000 revenue bond issue. The annual level debt service requirement is $5,000,000. In the first fiscal year, the municipality has collected revenues of $8,000,000. The "Coverage Ratio" is: A. $200,000,000 / $5,000,000 B. $8,000,000 / $5,000,000 C. $5,000,000 / $8,000,000 D. $13,000,000 / $200,000,000
B. $8,000,000 / $5,000,000 pledged revenues / debt service requirements
New issues of short term municipal notes and bonds are available in which form? A. Bearer B. Book Entry C. Registered to Principal only D. Registered to Principal and Interest
B. Book Entry
A municipal bond that has a put option is protected against depreciation due to: I rising interest rates II falling interest rates III rising demand for the issue IV falling demand for the issue A. I and III B. I and IV C. II and III D. II and IV
B. I and IV
Municipal variable rate demand notes: I have a minimum value which will never go below par II have a maximum value which will never go above par III are subject to market risk IV are not subject to market risk A. I and III B. I and IV C. II and III D. II and IV
B. I and IV
Ultimate payment of debt service on moral obligation bonds is dependent upon: A. Earnings coverage B. Legislative apportionment C. Judicial edict D. Court validation
B. Legislative apportionment
Short sale transactions are typical for all of the following EXCEPT: A. Treasury bonds B. Municipal bonds C. Common stock D. Listed options
B. Municipal bonds
Net Overall Debt of a municipality is: A. Bonded Debt + Overlapping Debt B. Net Direct Debt + Overlapping Debt C. Bonded Debt - Overlapping Debt D. Net Direct Debt - Overlapping Debt
B. Net Direct Debt + Overlapping Debt
A municipality issues a new revenue bond offering that has the same claim on revenues of the facility as a prior bond offering. The new debt issue is known as a(n): A. Junior lien debt B. Parity bond C. Double barreled bond D. Senior lien debt
B. Parity bond
The ratio of pledged revenues to debt service requirements is: A. Pledged revenues / annual interest expense B. Pledged revenues / annual interest expense and mandatory sinking fund deposits C. Annual interest expense / pledged revenues D. Annual interest expense and mandatory sinking fund deposits / pledged revenues
B. Pledged revenues / annual interest expense and mandatory sinking fund deposits
To smooth out tax collections, a municipality will issue a: A. BAN B. TAN C. RAN D. TRAN
B. TAN
The principal advantage of purchasing a variable rate municipal note is: A. The interest rate can be expected to remain fairly stable B. The market value can be expected to remain fairly stable C. The marketability risk can be expected to be lower D. The credit risk can be expected to be lower
B. The market value can be expected to remain fairly stable
In a municipal bond contract, a "covenant of defeasance" would allow the issuer to: A. redeem the issue in part or full at predetermined date(s) and prices B. advance refund the issue under the terms specified in the bond contract C. omit interest or principal repayments if coverage ratios decline below specified limits D. reset interest rates periodically at predetermined dates based upon recognized interest rate indices
B. advance refund the issue under the terms specified in the bond contract
A municipal variable rate demand note is a municipal: A. note that may be retired prior to maturity on any interest payment date at the demand of the issuer B. bond that gives the holder a tender option feature, usually at par, as of the reset date C. note that requires the issuer to reset the interest rate to the market rate upon demand of the holder D. bond that allows the issuer to vary the repayment date, upon giving written notice to the holders
B. bond that gives the holder a tender option feature, usually at par, as of the reset date
Additional security backing a general obligation bond is provided if the issuer has: A. a low ratio of Overall Net Debt to Assessed Value of Property B. escrowed the issue to the maturity date C. backed the issue by a pledge of unlimited ad valorem taxing power D. received an unqualified legal opinion on the issue
B. escrowed the issue to the maturity date
A municipal issuer would call an issue for all of the following reasons EXCEPT: A. substantial funds have accumulated in the issuer's surplus account B. interest rates have risen sharply since the issuance of the bonds C. the facility built with the proceeds of the issue has been destroyed in a flood D. the proceeds of the issue were never expended due to legal obstacles
B. interest rates have risen sharply since the issuance of the bonds
Municipalities would issue tax exempt commercial paper for all of the following reasons EXCEPT to: A. meet a temporary cash shortage due to unforeseen extraordinary expenses B. refund an outstanding bond issue C. provide construction period financing that will be permanently financed by a future bond sale D. smooth out collections of funds that are normally subject to seasonal fluctuations
B. refund an outstanding bond issue
The opinion as to the federal tax-exempt status of a municipal bond is provided by the: A. Internal Revenue Service B. Bond attorney C. Underwriter's counsel D. Securities and Exchange Commission
B. Bond attorney
Which statement is TRUE about a Certificate of Participation (COP)? A. COPs are subject to statutory debt limits B. COPs are backed by a pledge of lease revenues C. COPs have a higher credit rating than G.O. bonds of the same issuer D. COPs are full faith and credit obligations of the issuer
B. COPs are backed by a pledge of lease revenues
Which of the following bond issues would most likely have a mandatory sinking fund? A. Treasury Bond B. Hospital Revenue Bond C. State General Obligation Bond D. Double Barreled Bond
B. Hospital Revenue Bond
Under a municipal revenue bond rate covenant, charges for the use of a facility must be set at a level sufficient to cover: I. Operation and maintenance of the facility II. Debt service and mandatory deposits to the debt service reserve fund III. Optional sinking fund deposits IV. Deposits to the reserve maintenance fund A. I only B. I and II C. III and IV D. II and III
B. I and II
A municipality is at its debt limit and wishes to sell additional bonds. Voter approval is required for the municipality to sell: I. Limited tax general obligation bonds II. Unlimited tax general obligation bonds III. Self-supporting revenue bonds IV. Self-supporting industrial revenue bonds A. I only B. I and II only C. III and IV only D. I, II, III, IV
B. I and II only
From an issuer's standpoint, as the years progress, "level debt service" serial bond issues have: I. Decreasing interest payment amounts II. Increasing interest payment amounts III. Decreasing principal repayment amounts IV. Increasing principal repayment amounts A. I and III B. I and IV C. II and III D. II and IV
B. I and IV
Mandatory sinking funds for municipal issues are: I. found in revenue bond issues II. not found in revenue bond issues III. found in general obligation bond issues IV. not found in general obligation bond issues A. I and III B. I and IV C. II and III D. II and IV
B. I and IV
Which of the following projects would be financed by a general obligation bond issue? A. The construction of a new subway line B. The construction of a new junior high school C. The construction of a new hydroelectric generating plant D. The construction of a new sewage treatment plant
B. The construction of a new junior high school
A facility built with a revenue bond issue has been condemned. Which of the protective covenants found in the trust indenture would be activated? A. defeasance covenant B. catastrophe call covenant C. maintenance covenant D. sinking fund covenant
B. catastrophe call covenant
All of the following are sources of income available for general obligation bond debt service EXCEPT: A. ad valorem taxes B. highway tolls C. license fees D. assessments
B. highway tolls
Income sources backing a special tax bond issue could be all of the following EXCEPT a(n): A. gasoline tax B. property tax C. sales tax D. alcohol tax
B. property tax
Special assessment bond issues are paid from: A. taxes levied upon all taxable property within the municipality, without limitation as to rate or amount B. taxes levied upon all taxable property within a particular locality, not to exceed the benefit derived from the improvement C. revenues pledged from the operation of a facility built with the proceeds of the issue D. excise taxes placed upon the sale of either alcohol, tobacco, or fuel
B. taxes levied upon all taxable property within a particular locality, not to exceed the benefit derived from the improvement
A municipal revenue bond trust indenture includes an "additional bonds test" covenant. This means that: A. the issuer is prohibited from issuing new debt under any circumstance B. the issuer is prohibited from issuing new debt unless the facility's revenues are sufficient to pay for existing and additional debt C. the issuer is prohibited from issuing new debt unless outstanding bonds are called D. additional debt can be issued without restriction
B. the issuer is prohibited from issuing new debt unless the facility's revenues are sufficient to pay for existing and additional debt
A city has a total assessed value of property of $1,700,000,000 and a tax rate of 10 mills. For the year, the city collects $14,000,000 of taxes. The city's collection ratio is: A. $14,000,000 / $1,700,000,000 B. $1,700,000,000 / $14,000,000 C. $14,000,000 / $17,000,000 D. $17,000,000 / $14,000,000
C. $14,000,000 / $17,000,000 The "mill" rate is the tax rate in the city. 1 "mill" = 1/1,000 = .001. = $1 per $1,000 of assessed value. Since the city has a tax rate of 10 mills, the tax is $10 per $1,000 of assessed value. The total assessed value of $1,700,000,000 means that taxes assessed equal $10 x 1,700,000 = $17,000,000. Since the city only collected $14,000,000 of the assessed taxes, its collection ratio is $14,000,000 / $17,000,000 = 82%.
Which municipal bond is MOST likely to have a mandatory sinking fund provision in the Trust Indenture? A. Tax Anticipation Notes B. Water District Bonds C. Dormitory Revenue Bonds D. School District Bonds
C. Dormitory Revenue Bonds
If a municipality is expecting to receive federal funding for mass-transit programs, it could borrow against the expected funds to be received by issuing: A. BANs B. TANs C. GANs D. CLNs
C. GANs
An analysis of general obligation bonds would include: I examination of collection ratios II evaluation of engineer's reports III analysis of debt to value ratios IV analysis of debt service coverage ratios A. I and II only B. III and IV only C. I and III only D. I, II, III, IV
C. I and III only
The ratio of net direct debt plus overlapping debt to assessed valuation of property is used to: I analyze general obligation bonds II evaluate the issuer's creditworthiness III evaluate the issuer's overall ability to service its debt burden IV evaluate the issuer's ability to collect taxes owed A. I only B. III and IV only C. I, II, III D. I, II, III, IV
C. I, II, III
Which of the following statements are true regarding Construction Loan Notes ("CLNs")? I The use of CLNs allows the municipal issuer to reduce its interest cost when constructing a new facility II The maturity of CLNs is generally 2 - 3 years III Accrued interest on CLNs is computed on an actual day month / actual day year basis IV When the facility is completed, the permanent financing is added to the outstanding balance ("basis") of the CLNs A. I only B. II and III only C. I, II, III D. I, II, III, IV
C. I, II, III
A municipality would defease its debt with which of the following? I U.S. Government securities II U.S. Government agency securities III AAA Municipal securities IV Bank certificates of deposit A. I and II only B. III and IV only C. I, II, IV D. I, II, III, IV
C. I, II, IV
Municipalities would issue tax exempt commercial paper for which of the following reasons? I To smooth out collections of funds that are normally subject to seasonal fluctuations II To meet a temporary cash shortage due to unforeseen extraordinary expenses III To refund an outstanding bond issue IV To provide construction period financing that will be permanently financed by a future bond sale A. I only B. III only C. I, II, IV D. I, II, III, IV
C. I, II, IV
Which of the following are participants that trade municipal bonds in the secondary market? I Bank dealers II General securities dealers III Issuers IV Municipal broker's brokers A. I and II only B. III and IV only C. I, II, IV D. I, II, III, IV
C. I, II, IV
A municipal variable rate demand note is: I a short term issue II a long term issue III issued at short-term interest rates IV issued at long-term interest rates A. I and III B. I and IV C. II and III D. II and IV
C. II and III
When an issuer refinances an outstanding debt issue, the bonds which are MOST likely to be refunded by the issuer are bonds with the: I lowest interest rates II highest interest rates III lowest call premiums IV highest call premiums A. I and III B. I and IV C. II and III D. II and IV
C. II and III
Which of the following are TRUE regarding municipal bonds offered out "firm" by one dealer to another? I The buying dealer is able to renegotiate the price II The buying dealer can sell the bonds before actually purchasing them III The selling dealer will not change the price for a specified time period IV The buying dealer has control over the bonds for a specified time period A. I and II only B. III and IV only C. II, III, IV D. I, II, III, IV
C. II, III, IV
Issuers of Federal tax exempt commercial paper include: I Corporations II Federal Government III Municipal Governments A. I only B. II only C. III only D. I, II, III
C. III only
Nominal quotes for municipal bonds are: A. a firm price at which a transaction would take place B. a likely price at which a transaction would take place C. an indication of a price given for informational purposes only D. prohibited to be disseminated to municipal market participants
C. an indication of a price given for informational purposes only
A debt obligation issued by a municipality for the benefit of a corporate user is a(n): A. overlapping debt B. double barreled debt C. industrial development debt D. moral obligation debt
C. industrial development debt
Construction Loan Notes are repaid from: A. rents received from the housing project built with the proceeds of the offering B. rent subsidies received from the U.S. Government C. monies received from a permanent take-out financing D. monies received from the issuance of the Construction Loan Note
C. monies received from a permanent take-out financing
When analyzing municipal general obligation bonds of different issuers, it is difficult to use the ratio of Overall Debt / Assessed Valuation because: A. the ratio does not consider a municipality's ability to collect the taxes levied on all real property B. municipalities differ in their method of computing overall debt C. municipalities differ in their method of computing assessed value of properties D. the ratio does not consider the management capabilities of municipal government
C. municipalities differ in their method of computing assessed value of properties
All of the following statements are true regarding a 5% municipal bond purchased at par that has a put option at par EXCEPT the: A. investor's yield cannot rise above 5% B. put would be exercised if interest rates rise C. put option will not affect the market risk of the security D. investor can exercise the put at his or her discretion
C. put option will not affect the market risk of the security
The interest received from older "tax free" Industrial Development Bond (IDBs) issues is taxable if the holder of these bonds is: A. a customer B. a broker/dealer C. the corporate lessee D. a bank
C. the corporate lessee
A municipality has a tax rate of 18 mills. A piece of real property in the municipality is assessed at $180,000 and has a fair market value of $165,000. The annual tax liability on the property is: A. $1,800 B. $2,970 C. $3,240 D. $4,420
C. $3,240 One mill = .001; 18 mills = .018. Taxes are based on assessed valuation, not fair market value. .018 x $180,000 = $3,240. Another way to think about it is that 1 mill = $1 of tax for each $1,000 of assessed value. question # 2-4-7-3
A sewage treatment plant has been financed through a revenue bond issue containing a Net Revenue Pledge. Prior to paying Debt Service, which of the following expenses would be deducted by the issuer? I. Sewage transport costs II. Sewage treatment costs III. General and administrative expenses IV. Depreciation and amortization A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV
C. I, II, III
The municipal bond counsel opines on which of the following? I. Validity II. Legality III. Feasibility IV. Tax exempt status A. I and II only B. III and IV only C. I, II, IV D. I, II, III, IV
C. I, II, IV
Which of the following sources of income are used to back revenue bond issues? I. Excise taxes II. Lease rentals III. Ad valorem taxes IV. Enterprise activity income A. I and III only B. II and IV only C. I, II, IV D. I, II, III, IV
C. I, II, IV
A double barreled municipal bond is one that is backed by: A. 2 separate sources of revenue B. 2 separate sources of taxing power C. a pledge of revenues and the backing of that municipality's ad valorem taxing power D. a pledge of revenues and the unconditional guarantee of the U.S. Government
C. a pledge of revenues and the backing of that municipality's ad valorem taxing p
Under a net revenue pledge, once operation and maintenance costs are paid, what is the next item that is paid? A. debt service reserve fund B. reserve maintenance fund C. debt service expense D. renewal replacement
C. debt service expense
Constitutional debt limits are imposed on the issuance of: A. revenue bonds B. moral obligation bonds C. general obligation bonds D. industrial development bonds
C. general obligation bonds
Periodic deposits of monies to the sinking fund are required to cover required: A. Interest payments only B. principal payments only C. interest and principal payments D. interest payments and principal payments; and optional principal payments
C. interest and principal payments
An "unqualified" legal opinion on a revenue bond is one which: A. states that the pledged revenues are subject to prior liens B. is given by an unqualified bond counsel C. states that no liens have been found against pledged revenues D. states that the bond counsel is qualified in the state to render an opinion
C. states that no liens have been found against pledged revenues
A municipality has issued a general obligation bond. Which of the following are sources of income available for debt service? I. Collected current ad valorem taxes II. Collected back due ad valorem taxes III. Fines IV. Assessments A. I and IV B. II and III C. I, III, IV D. I, II, III, IV
D. I, II, III, IV
In a period of rising interest rates, a bond dealer would engage in which of the following activities? I Lower prices in interdealer quote publications such as Bloomberg for municipal bonds II Place "request for bids" in services such as Bloomberg on depreciated positions where the dealer has no current interest III Bid for bonds to cover previously established short positions IV Buy put options on debt instruments to hedge existing long positions A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV
D. I, II, III, IV
Which of the following statements are TRUE regarding a 5% municipal bond purchased at par that has a put option at par? I The yield on the bond can fall below 5% II The put would be exercised if interest rates rise III The holder can receive 100% of par for the bond if he or she exercises the put option IV The investor can exercise the put at his or her discretion A. I and II only B. III and IV only C. II, III, IV D. I, II, III, IV
D. I, II, III, IV
A municipal variable rate demand note: I is considered to be a short term issue II is considered to be a long term issue III gives the issuer the right to call the bond from the holder on pre-set dates IV gives the holder the right to put the bond to the issuer on pre-set dates A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
B. Which statements are TRUE about a Certificate of Participation (COP)? I COPs are subject to statutory debt limits II COPs are not subject to statutory debt limits III COPs have a higher credit rating than G.O. bonds of the same issuer IV COPs have a lower credit rating than G.O. bonds of the same issuer A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
Municipal broker's brokers: I deal with the general public II do not deal with the general public III take inventory positions IV do not take inventory positions A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
Revenue Anticipation Notes are a(n): I funded debt II unfunded debt III source of permanent financing IV source of temporary financing A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
Special assessment bond issues are used to fund a public improvement that will: I accrue to the public at large II accrue to segment of the public III be paid from taxes which have no relationship to the value of the benefit received IV be paid from taxes which have a relationship to the value of the benefit received A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
When analyzing a general obligation bond, all of the following ratios would be evaluated EXCEPT the: A. collection ratio B. debt per capita ratio C. debt to value ratio D. debt service coverage ratio
D. debt service coverage ratio
A municipal issuer has sold housing bonds to build subsidized housing, where the homeowners make the mortgage payments to the municipal authority. The homeowners begin to prepay their mortgages at a faster than expected rate. If this occurs, the issuer will retire outstanding bonds by making a(n): A. mandatory call B. extraordinary mandatory call C. optional call D. extraordinary optional call
D. extraordinary optional call
Variable rate municipal notes are NOT subject to which of the following risks? A. legislative risk B. default risk C. marketability risk D. interest rate risk
D. interest rate risk
The proceeds of a "Build America Bond" may be used for all of the following EXCEPT: A. public buildings B. transportation infrastructure C. water and sewer projects D. prerefunding outstanding issues
D. prerefunding outstanding issues
A municipal bond which funds an improvement that benefits only a small portion of the community is a: A. general obligation bond B. double barreled bond C. moral obligation bond D. special assessment bond
D. special assessment bond
All of the following could be overlapping debts EXCEPT: A. school district debt B. water district debt C. county debt D. state debt
D. state debt
As stated in the flow of funds found in a revenue bond issue's trust indenture, monies left over after all other uses are exhausted are placed in the: A. Revenue Fund B. Debt Service Reserve Fund C. Sinking Fund D. General Surplus Fund
D. General Surplus Fund
The bond counsel will review which of the following to ascertain if a municipal issuer has the authority to sell bonds? I. State constitution II. Validity of the signatures of the issuer's representatives III. Enabling legislation IV Local statutes and judicial opinion A. I and II B. III and IV C. I, III, IV D. I, II, III, IV
D. I, II, III, IV
When does an investor receive payment of interest and principal on a Capital Appreciation Bond (CAB)? I. Interest is paid semi-annually II. Interest is paid at maturity III. Principal is paid semi-annually IV. Principal is paid at maturity A. I and III B. I and IV C. II and III D. II and IV
D. II and IV
In order to render an opinion on a new municipal bond issue, the bond counsel will examine all of the following EXCEPT: A. Municipal statutes B. State constitution and amendments C. Tax code and interpretive regulations D. Securities Act of 1933
D. Securities Act of 1933
The revenue fund consists of: A. monies to pay for extraordinary maintenance or replacement costs B. monies to pay for regularly scheduled major repairs and replacement costs C. monies to meet debt service requirements D. all gross revenues from the facility
D. all gross revenues from the facility
All of the following are evaluated in the feasibility study prepared prior to the issuance of revenue bonds EXCEPT: A. expected demand for the facility B. effect of competing facilities C. expected operating costs of the facility D. bond trust indenture
D. bond trust indenture
Under the flow of funds in a revenue bond trust indenture, net revenue is defined as gross revenue minus: A. sinking fund expenses B. debt service reserve expenses C. debt service expenses D. operation and maintenance expenses
D. operation and maintenance expenses
The normal priority of the flow of funds for a revenue bond net revenue pledge, as found in the Trust Indenture, is: A. debt service, operation and maintenance reserve, operation and maintenance, debt service reserve B. debt service reserve, operation and maintenance reserve, operation and maintenance, debt service C. operation and maintenance reserve, operation and maintenance, debt service, debt service reserve D. operation and maintenance, debt service, debt service reserve, operation and maintenance reserve
D. operation and maintenance, debt service, debt service reserve, operation and maintenance reserve
Under a municipal revenue bond rate covenant, rates must be set to cover all of the following EXCEPT: A. operation of the facility B. debt service C. maintenance of the facility D. optional sinking fund deposits
D. optional sinking fund deposits
