Series 52: Chapter 1 Practice Questions

Chapter 1 Practice Questions

1. 1. The owner of a house with a market value of $450,000 and an assessed value of $300,000, and with an ad valorem tax of 4 mills would pay a property tax of:
2. A. $120
3. B. $1,200
4. C. $12,000
5. D. $120,000
6. 2. All of the following bonds would be backed by ad valorem taxes except:
7. A. A bond issued by the Philadelphia Water Department
8. B. A bond issued by Howard County
9. C. A bond issued by Western School District
10. D. A bond issued by the City of Cincinnati
11. 3. Which of the following are ultimately backed by the full faith and credit of the issuer?
12. I. Moral obligation bonds
13. II. General obligation bonds
14. III. Double-barreled bonds
15. IV. Lease revenue bonds
16. A. I and II
17. B. III and IV
18. C. II and III
19. D. II and IV
20. 4. Local government investment pools may have as participants:
21. A. Commercial institutional investors
22. B. Government entities
23. C. Individual investors
24. D. Government employees
25. 5. All of the following are characteristic of a capital appreciation bond except:
26. A. The discount is calculated using compound interest.
27. B. It converts from a zero coupon bond to a coupon bond at a specified time.
28. C. The initial purchase price is counted against the issuer’s statutory debt limit.
29. D. It is typically callable.
30. 6. The town of Sharpsville plans to issue a long-term bond for a capital project, but is still in the process of working out the final costs. Since they need to begin work as soon as possible, which of the following would Sharpsville most likely issue?
31. A. Construction loan notes
32. B. Bond anticipation notes
33. C. Grant anticipation notes
34. D. Tax anticipation notes
35. 7. Tax-exempt commercial paper is usually backed by:
36. A. The full faith and credit of the issuer
37. B. Property taxes
38. C. Revenue
39. D. A lin