Which of the following bonds are often repaid from a specific project’s income?

Revenue bonds are specifically designed to be repaid from the income generated by a particular project, such as a toll road, a hospital, or a utility service. This means that the revenue collected from the project is used to make the bond payments, linking the financial success of the project directly to the ability to repay the debt. Since these bonds are not backed by the general taxing power of the issuing municipality, they carry a different risk profile, often reflecting the viability and performance of the specific project they finance.

In contrast, general obligation bonds are backed by the full faith and credit of the issuing municipality and are repaid from general tax revenues. Hybrid bonds typically incorporate features from both revenue and general obligation bonds but do not have the specific repayment structure associated with project income. Short-term bonds are issued for a brief period and are primarily aimed at meeting immediate financing needs, rather than being tied to the income from a specific project. By understanding these distinctions, one can appreciate why revenue bonds are linked directly to the revenues generated from individual projects.