A state government would issue a ________ bond to finance the construction of a toll bridge and then use the tolls to pay for the bond.

Question

Quizplus · Accepted Answer

A revenue bond is issued by a government entity to finance a specific project, such as a toll bridge, and the repayment of the bond is supported by the revenue generated by the project. Therefore, a revenue bond is the best choice for financing the construction of a toll bridge with tolls being used to pay for the bond. A general obligation bond is not specific to a particular project and the repayment is supported by the government's ability to generate taxes. A convertible bond allows bondholders to convert their bonds into shares of stock and a secured bond is backed by collateral.

A State Government Would Issue a ________ Bond to Finance