A municipal bond that is backed by the issuing municipality's power to tax and by its ability to borrow money is called a:
Answer: (c), general obligation bond
A "general obligation bond" or "GO Bond" is a municipal bond (a debt investment) that is backed by the issuing municipality's power to tax and by its ability to borrow money (its credit). These bonds can be contrasted to bonds that are secured by a municipality's assets (collateral) or those which are backed by the promise of future revenue from the bond-financed project. The rating for a GO bond depends upon the issuing jurisdiction's perceived ability to pay back the debt with tax revenue or through refinancing it.
