Test Prep Test Prep Certifications CGFM Questions & Answers

• Question 31:

  The government finance association recommends public sale, but under which of the following condition:

  I. The issue has on uninsured credit rating of A or above

  II. The issue is not so large that it cannot be absorbed by the market.

  III. The issue is not so small as to attract too few investors

  IV.

  Interest rates are stable and market demand is strong

  V.

  The market view the issue as warily complex or innovation.

  VI.

  The issue is backed by full faith and credit or by a strong revenue system.

  A.

  I, II, III

  B.

  I, II, III

  C.

  I, II, III, IV, V

  D.

  All EXCEPT V

  Correct Answer: D

• Question 32:

  The lease agreement contains a ___________ clause that permits the government to cancel the capital lease, without defaulting, by not appropriating payment for the lease.

  A. Appropriation

  B. Non-appropriation

  C. It depends

  D. None-of these

  Correct Answer: B

• Question 33:

  Like revenue bonds, ___________ bonds finance projects that are secured by revenue. Most of these bonds do not require voter approval, nor are they subject the Go cap.

  A. Revenue bonds

  B. term financed bonds

  C. Tax-exempt bonds

  D. so bonds (special obligation bonds)

  Correct Answer: D

• Question 34:

  General obligation (Go) bonds are typically repaid over 20 years and are usually sold:

  A. Publicly to the lowest bidder

  B. Privately to the lowest bidder

  C. Publicly to the highest bidder

  D. Privately to the highest bidder

  Correct Answer: A

• Question 35:

  Revenue bonds are a liability limited to the pledged revenue. The issuer is thus not obligated _________ to repay the debt.

  A. Levy taxes

  B. General fund revenues

  C. Both of these

  D. None of these

  Correct Answer: C

• Question 36:

  Governments are increasingly using capital lease financing because it:

  A. Dose not pledge full-faith-and-credit

  B. is not subject to voter approval

  C. is usually not subject to a state's Go debt cap

  D. All of these

  Correct Answer: D

• Question 37:

  Which one of the following is not the type of debt financing?

  A. Go bonds

  B. Revenue bonds

  C. Special obligation bonds

  D. None of these

  Correct Answer: D

• Question 38:

  All of the following are core banking services EXCEPT:

  A. Investment management

  B. Security services

  C. Reconciliation Services

  D. Concentration and Zero balance

  Correct Answer: A

• Question 39:

  A full-Faith-and-credit bond is a term used for:

  A. Lease Financing

  B. Revenue Bonds

  C. General obligation Bonds

  D. None of these

  Correct Answer: C

• Question 40:

  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.

  A. Go debt capacity

  B. Go debt use capacity

  C. Rate covenant

  D. None of These

  Correct Answer: C