Exercise

Answer the following questions.

1. A covenant that requires the municipality to maintain the facility financed by the bond is called a/n _____ covenant.

2. A covenant that requires bondholders to carry enough insurance to protect against damage or destruction to the facility financed by the bond is called a/n _____ covenant.

3. A covenant that requires the issuer to keep audited annual financial reports is called a/n _____ covenant.

4. The order in which funds are allocated between debt and operations and maintenance for a revenue bond is called a/n _____ requirement.

5. When funds are allocated to debt service before other expenses, this is called a/n _____ pledge.

6. When funds are allocated to operations and maintenance before debt service, this called a/n _____ pledge.

7. After fund