Your hometown is looking to build a new multi purpose stadium for the local semi pro soccer team. Proceeds from ticket sales go directly to the city. In order to fund the stadium, the city has decided to issue bonds. The bonds can be best classified as a ________ bond.
A) mutual, general obligation
B) municipal, secured
C) callable, revenue
D) municipal, revenue
E) treasury, callable

Question

Quizplus · Accepted Answer

Municipal bonds are issued by local governments or their agencies, and revenue bonds are those that are repaid from the proceeds of the project they finance, such as a stadium. In this case, since the city is issuing the bond to fund a stadium and plans to use ticket sales proceeds to repay the bond, it is best classified as a municipal, revenue bond.

Your Hometown Is Looking to Build a New Multi Purpose