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GFOA CPFO Exam - Topic 1 Question 20 Discussion

As the security of Go debt issue, state and local governments pledge their Faith and credit (their general taxing power); however revenue bonds are not backed by full faith or credit. Instead, the bond security agreement pledges a _________, known as the debt cover.
C) Rate covenant
A) Go debt capacity
B) Go debt use capacity
D) None of These

GFOA CPFO Exam - Topic 1 Question 20 Discussion

Actual exam question for GFOA's CPFO exam
Question #: 20
Topic #: 1
[All CPFO Questions]

As the security of Go debt issue, state and local governments pledge their Faith and credit (their general taxing power); however revenue bonds are not backed by full faith or credit. Instead, the bond security agreement pledges a _________, known as the debt cover.

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Suggested Answer: C

by Ressie at May 07, 2022, 03:03 PM

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Celestina
7 months ago
Just to clarify, "None of These" isn't an option here, right?
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Marjory
7 months ago
Wait, are we sure about that? I thought revenue bonds had different backing.
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Lera
8 months ago
Totally agree with Daniela, "Rate covenant" is the right answer!
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Lisha
8 months ago
I thought it was "Go debt capacity"? Seems like a safer bet.
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Daniela
8 months ago
It's definitely "Rate covenant" that secures revenue bonds.
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Chanel
8 months ago
I definitely recall that revenue bonds don’t have the same backing as general obligation bonds, but I can’t quite remember the term for the debt cover.
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Dominic
8 months ago
I think it might be related to "rate covenant," but I’m not entirely confident. I feel like I saw a similar question in our practice exams.
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Maile
8 months ago
I remember studying that revenue bonds are secured by specific revenue sources, but I’m not sure what the exact term for the debt cover is.
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Corrinne
8 months ago
I’m leaning towards "Go debt capacity," but I could be mixing it up with something else we covered. This is tricky!
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Edwin
8 months ago
Okay, let me think this through. Sigma phase is a thermodynamically stable phase that can precipitate out during long-term exposure at elevated temps. So the time of exposure is likely the key factor here. I'll go with option A.
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Una
8 months ago
Hmm, I'm not sure about this one. The requirements mention an on-premises dependency management system, but the solution doesn't seem to address that. I'll need to think this through a bit more.
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Yuette
8 months ago
I think the main advantage is that local traffic is indeed load-balanced between the firewalls, but I'm not completely sure if that's the only benefit.
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Tiera
8 months ago
Hmm, I'm not sure about this one. The options seem a bit confusing to me. I'll need to think it through carefully and make sure I understand the Proof of Work process before selecting an answer.
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Chan
8 months ago
Hmm, I'm a bit unsure about this one. I know the credit terms are important, but I'm not sure if the selling price or number of suppliers are really relevant factors. I'll have to think this through carefully.
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