Jason
Bonds that have one final maturity are called
A. Serial bonds
B. Callable Bonds
C. Term Bonds
D. Balloon Bonds
C. Term Bonds
An example of a contingent liability is (a)
A. payroll obligations.
B. bond issued by a hospital but guaranteed by the city.
C. bond issued by the state in which a city is located.
D. bond issued by the government that is due for payment.
B. bond issued by a hospital but guaranteed by the city.
The document that contains remedies for bondholders in the event of bankruptcy is the
A. trust indenture
B. continuing disclosure memorandum.
C. official statement.
D. charter of the issuing municipality
A. trust indenture
In a Chapter 9 bankruptcy filing, a plan of adjustment may be proposed by which of the following?
A. The judge
B. The city or county’s creditors
C. Labor unions
D. The city or county that filed for bankruptcy
D. The city or county that filed for bankruptcy
An MD&A does not include which of the following?
A. Statistical section of the CAFR
B. Introduction to a government’s financial statements
C. Highlights of the financial statements that follow
D. Easy to read overview of the financial statements that follow
A. Statistical section of the CAFR
Which of the following is true about a technical default?
A. There is a grace period allowed to the issuer to correct the situation before bondholders take action
B. It results when the issuer fails to pay bond principal and interest
C. It is the most serious type of issuer default
D. It is also known as a monetary default
A. There is a grace period allowed to the issuer to correct the situation before bondholders take action
A technical default occurs when
A. a bond covenant is violated even though payments were made as required.
B. a bond is advance refunded.
C. a bond fails to make principal payments on time.
D. a bond fails to make interest payments on time.
A. a bond covenant is violated even though payments were made as required.
The amount of outstanding principal and amount of interest decreases over the life of the bond." This statement describes
A. term maturity
B. level principal
C. Level debt service
D. Series maturity
B. level principal
The notes to financial statements is a key section of the CAFR. Which of the following is unlikely to be found in the notes?
A. Changes in the list of top taxpayers
B. Discussion of the city and its form of government
C. Long-term debt
D. Capital assets
A. Changes in the list of top taxpayers
Which of the following would not trigger a technical default?
A. Failure to pay bond interest and principal
B. Failure to comply with bond contract covenants
C. Failure to fund debt reserve
D. Failure to maintain insurance on the project
A. Failure to pay bond interest and principal
Of the following statements, which one most accurately describes municipal bond default history
A. The default rate for water and sewer utilities is higher than for enterprises like airports or toll roads
B. The default rate of unrated municipal bonds is higher than the default rate of rated municipal bonds
C. The default frequency of revenue bonds is less than for GO bonds
D. Municipal Bond defaults are more frequent than corporate bond defaults
B. The default rate of unrated municipal bonds is higher than the default rate of rated municipal bonds
All of following are examples of credit enhancements used by municipal issuers EXCEPT
A. Letters of credit
B. Trust indentures
C. Surety bonds
D. Bond insurance
B. Trust indentures
Which of the following categories of a municipal debt statement includes the municipality's share of overlapping debt?
A. Overall Debt
B. Bonded debt
C. Direct debt
D. Self-supporting debt
A. Overall Debt
Which of the following describes a possible opinion in the independent auditor’s report?
A. Adverse opinion
B. Unqualified/qualified opinion
C. Normal opinion
D. A and B
D. A and B
In addition to being discussed in the notes, the statement of position of a pension plan may also be found in the CAFR section devoted to:
A. Internal service funds
B. General funds
C. Proprietary funds
D. Fiduciary funds
D. Fiduciary funds
Of the statements below, which of the following is least correct in comparing a municipal CAFR and budget
A. A budget is a plan for a upcoming fiscal period while a CAFR contains results of prior periods
B. A CAFR provides totals of all financial accounting for a municipality which are not included in a budget
C. A Budget shows where tax income and other revenue sources are to be allocated while a CAFR includes information about past years allocations and accumulations
D. A budget provides a more comprehensive view of all municipal income, expenditures and investments than a CAFR
D. A budget provides a more comprehensive view of all municipal income, expenditures and investments than a CAFR
In the analysis of municipal revenue bond issues all of the following are material in determining whether revenues are sufficient for debt service coverage EXCEPT:
A. Additional bonds test
B. Demographic report
C. OPEB Obligations
D. Feasibility study
C. OPEB Obligations
Which of the following is true regarding the auditor's opinion?
A. A government in good condition does not need an auditor's opinion
B. A government in good condition can get an adverse opinion
C. A government in good condition always receives a clean opinion
D. A government in poor financial condition must always receive an adverse opinion
Tables showing budget versus actual are important because
B. A government in good condition can get an adverse opinion
A discussion of the city’s economic and financial prospects for the future can be found in what section of the CAFR?
A. Notes
B. MD&A
C. OPEB
D. Fiduciary funds
B. MD&A
A conduit borrower does not comply with the issuer’s established terms. A likely result of this scenario is which of the following?
A. An acceleration in the terms of payment
B. A monetary default
C. A decline in the issuer’s credit rating
D. An advance refunding
A. An acceleration in the terms of payment
Which of the following municipal debt service coverage ratios would be most attractive to investors from a credit quality perspective
A. 1X
B. 1.5X
C. 2X
D. 2.5X
D. 2.5X
Which of the following is a major difference between defined benefit and defined contribution plans?
A. Defined benefit plans guarantee the amount retirees receive in benefits, but defined contribution plans do not
B. Defined contribution plans are fully funded by the employer but defined benefit plans are not
C. There is no difference
D. Defined contribution plans guarantee that investments will grow by a set amount
A. Defined benefit plans guarantee the amount retirees receive in benefits, but defined contribution plans do not
Tables showing budget versus actual are important because
A. it allows comparison of how accurate initial forecasts were in predicting budget outcomes
B. they show why cutting the budget is so important.
C. it helps explain how meaningless budgeting really is.
D. they show the need for new budgeting software.
A. it allows comparison of how accurate initial forecasts were in predicting budget outcomes
According to Moody’s Investors Service, the average recovery rate for municipal bonds in default between 1970-2013 was
A. 10%
B. 30%
C. 60%
D. 100%
C. 60%
Which of the following is an inappropriate action for a municipal advisor to take in a client’s application for a bond rating?
A. Promising the rating agency that financial improvements will occur next year
B. Guiding the client’s preparation to make a presentation at the rating agency
C. Practicing the client’s rating agency presentation with potential questions and answers
D. Organizing a site tour for rating agency analysts
A. Promising the rating agency that financial improvements will occur next year