Exam 14: Capital Finance and Debt Management

The primary source for financing large capital projects by state and local governments is borrowing from individuals and financial institutions like banks and capital market funds by issuing bonds.

Negotiated sales versus competitive sales of municipal bonds are more common in terms of the value of municipal bonds sold.

Securitizing a future revenue stream most closely resembles which type of bond?

Except for those with large market presence, such as states and major cities, whose role is it to arrange the actual sale of municipal bonds to financial institutions?

Most municipal bonds are issued locally or regionally and known only to local or regional investors.

What do we call municipal bonds issued in small denominations?

In the period of the late 1990s through 2018, individuals held what percentage of total outstanding municipal debt?

Who are the three most notable bond evaluating organizations upon whose ratings investors rely heavily?

List the primary participants in the municipal bond issuing process and describe their roles.

One disadvantage of a public sale is that some investors, including some pension funds, cannot purchase state or municipal securities except through a negotiated sale.

What type of bond pays out no interest until maturity, when both the principal and the interest are paid?

Which type of bond imposes a specific schedule of payments over a number of years?

What type of public debt instrument does not pay interest but allows the investor to subtract the equivalent interest from his or her federal income tax liability?

Few states impose a long term debt limit on their cities, towns, and school districts.

Local banks are the largest holders of local public debt.

What are the three sources of financing capital assets in the private sector? List and briefly describe each.

Which of the following is not a variant of concession contracting?

Which type of bond is politically easiest to issue?

What are the two categories of traditional long-term bonds used by public entities? List and briefly describe each.

Which of the following would not be a participant in the municipal bond market?