1. Which is not true about \"Revolving Loans\"? (2pts) a. Allows for immediate a

Question

1. Which is not true about "Revolving Loans"? (2pts) a. Allows for immediate access to a level of funds b. Have higher interest rates c. It is considered an effective source for financing major projects. d. Does not require an extensive approval process 2. Which revenue sources used by public agencies increase property taxes? (2pts) a. Revenue bonds b. Real estate transfer tax c. General obligation bonds d. Impact fees This type of bond fund is not the most popular because of the difficulty in managing the fund and attempting to project interest payments. (2pts) a. Serial annuity bonds b. Straight serial bonds 3. c. Serial bonds d. Term bond Which type of bond is attractive to investors because they are exempt from federal taxes? (2pts) a. Revenue bonds b. Serial bonds c. General obligation bonds d. Tax incremental financing bonds 4. 144 6 7 8 9 4 5

Explanation / Answer

1.The answer is C.

Revolving loans refer to an arrangement which allows the borrower to withdraw, repay, and redraw again, any amount within the agreed limit, for infinite number of times, until the arrangement expires.

Since there is a restriction on the sanctioned amount, such revolving loans cannot be used to finance major projects because such projects involve huge capital infusion.

2.The answer is B.

Real estate transfer taxes are taxes that are imposed by the states, counties and municipalities on the transfer of the title of real properties. Since it is directly related to the property tax, it leads to an increase in the overall property taxes

3.The answer is A

Under the scheme of serial annuity bonds, the total payment each period is the same, the interest portion of the payment gradually decreases and the principal payment gradually increases. Hence, managing the fund and projecting the interest payments become difficult.

4.The answer is A

Under present federal income tax law, the interest income earned from investing in municipal bonds is free from federal income taxes. Since Revenue taxes are a form of municipal bonds, they are exempt from federal taxes and hence attractive to investors.

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