FINRA Series 7

Category - Series 7

Which of the following is least relevant in evaluating the safety of a general obligation bond?
  1. per capital debt
  2. total GO debt as a percentage of market value of property
  3. total GO debt as a percentage of assessed value of property
  4. total debt service as a percentage of net operating revenue
Explanation
Answer: D - total debt service as a percentage of net operating revenue. This ratio is applicable to revenue bonds but not general obligation bonds. The other choices are all used in measuring credit risk in a GO bond.
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