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General Obligation municipal bonds: A. Have a deep secondary market B. Form a narrow set of...

General Obligation municipal bonds:

A. Have a deep secondary market

B. Form a narrow set of issues

C. Are used to finance specific revenue generating projects

D. Can be repaid by raising taxes by the issuing municipality

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Answer #1

D. Can be repaid by raising taxes by the issuing municipality

A general obligation municipal bonds are issued by local government and secured by all revenue sources of government including tax revenues of local government. These bonds are not linked with any specific revenue generating projects. Municipality may raise taxes (such as property tax) to repay the bondholders.

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