Series 52: Exercise

Exercise

Match the Type of Bond With Its Characteristics

Bonds

1. 1. _____ Special Tax Bonds
2. 2. _____ Special Assessment Bonds
3. 3. _____ Double-Barreled Bonds
4. 4. _____ Moral Obligation Bonds
5. 5. _____ Certificates of Participation (COPs)
6. 6. _____ Private Activity Bonds (PABs)
7. 7. _____ Alternative Minimum Tax (AMT) Bonds
8. 8. _____ Original Issue Discount (OID) Bonds
9. 9. _____ Zero Coupon Bonds
10. 10. _____ Floating Rate Bonds
11. 11. _____ Capital Appreciation Bonds (CABs)
12. 12. _____ Auction Rate Securities (ARSs)
13. 13. _____ Variable Rate Demand Obligations (VRDOs)
14. 14. _____ Tax Anticipation Notes (TANs)
15. 15. _____ Revenue Anticipation Notes (RANs)
16. 16. _____ Bond Anticipation Notes (BANs)
17. 17. _____ Tax-Exempt Commercial Paper

Characteristics

1. A. Bonds having characteristics of both revenue and general obligation bonds, except that the municipality is not obligated to back the bonds out of its general fund.
2. B. Bonds sold at a discount to face value. When the face value is paid at maturity, the discount becomes profit for the bondholder. Usually these are zero coupon bonds.
3. C. Revenue bonds payable from the proceeds of a special tax that is unrelated to the project being financed.
4. D. Notes issued by a municipality to finance projects that have been backed by revenue bonds.
5. E. Bonds whose interest rates are adjusted at predetermined times based on a predetermined interest rate index.
6. F. Notes usually issued at an OID for a maturity of 270 days or fewer, and usually backed by the municipality’s line of credit with a bank.
7. G. Long-term bonds that function like short-term bonds, because they have a floating interest rate and a put option the bondholder may exercise at any time.
8. H. Bonds backed by ad valorem ta