The difference between a general obligation and a revenue bond is:
A)the general obligation bond is backed by the full faith, credit, and "taxing power" of the governmental unit.
B)that for a revenue bond, the repayment of the issue is fully dependent on the revenue-generating capability of a specific project or venture.
C)that general obligation bonds are usually of high quality because of the taxing power behind most of them.
D)All of the above

Question

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A general obligation issue is backed by the full faith, credit, and "taxing power" of the governmental unit. For a revenue bond, on the other hand, the repayment of the issue is fully dependent on the revenue-generating capability of a specific project or venture, such as a toll road, bridge, or municipal arena. Because of the taxing power behind most general obligation (GO) issues, they tend to be of extremely high quality. Approximately three-fourths of all municipal bond issues are of the general obligation variety, and very few failures have occurred in the post-World War II era. Revenue bonds tend to be of more uneven quality, and the economic soundness of the underlying revenue-generating project must be carefully examined (though most projects are quite worthwhile).

The Difference Between a General Obligation and a Revenue Bond