As compared to general obligation bonds, the revenue bonds are considered as _________?
Correct answer: D. more risky
- A. more inflated
- B. less inflated
- C. less risky
- D. more risky
Explanation
General obligation bonds are backed by the taxing power of the issuing government, whereas revenue bonds depend on income from a particular project or service. Because that revenue may be uncertain, revenue bonds are generally more risky.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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