American Institute of Certified Planners (AICP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Discover strategies to excel in the AICP Exam. Use flashcards and multiple-choice questions with hints and explanations. Gain confidence and readiness for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.


Which bonds are repaid with receipts from a private firm?

  1. Taxable Bonds

  2. Special Assessment Bonds

  3. Private Activity Bonds

  4. General Obligation Bonds

The correct answer is: Private Activity Bonds

Private Activity Bonds are designed to be repaid with receipts generated from a private firm. These bonds are issued to finance projects that benefit the private sector, where the income produced by the project is used for repayment. This means that the revenue generated from the private firm's operations directly supports the bond's repayment, distinguishing them from other types of bonds, which may rely on different funding sources. Taxable Bonds are generally repaid from a broad base of taxable revenue rather than being tied to specific project outcomes. Special Assessment Bonds are typically repaid through assessments collected from property owners who benefit from the improvements made with the bond proceeds, rather than from private firm receipts. General Obligation Bonds are backed by the full faith and credit of the issuing government entity and are funded through general tax revenues, not specifically derived from private firm activities. In summary, the unique nature of Private Activity Bonds, with their repayment relying on project-specific revenue streams generated by private entities, affirms them as the correct choice in this context.