Which type of bond is backed by the full faith and credit of the issuer and its entire taxing power?
A) Fannie Mae
B) Freddie Mac
C) GSEs
D) General obligation
E) Revenue

Question

Quizplus · Accepted Answer

General obligation bonds are backed by the full faith and credit of the issuer and its entire taxing power, meaning that the issuer (usually a government entity) pledges to use any and all means necessary to repay the bond, including raising taxes if necessary. Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that issue mortgage-backed securities, while revenue bonds are backed by specific revenue streams, such as tolls or fees.

Which Type of Bond Is Backed by the Full Faith