Ace the 2025 Certified Treasury Pro Test – Cash In on Your Future Brilliance!

Revenue bonds are primarily financed through the income generated from specific projects or services that the bonds are funding. This means that the funds to pay back the bondholders come from the revenues created by the project itself, such as tolls from a toll road, fees from a utility service, or ticket sales from a public venue. This model ties the financial success of the bond directly to the project's performance, making it a distinct feature of revenue bonds compared to other types of bonds that rely on general revenue sources.

In contrast, tax revenues from residents are typically associated with general obligation bonds, which are backed by taxing power and thus represent a different category of municipal bond. State government allocations and private donations also do not serve as primary funding sources for revenue bonds, as these sources may provide additional support but do not primarily fund the debt repayment. Therefore, the characteristic nature of revenue bonds makes project-generated revenue the correct choice, as it underscores their reliance on the specific income produced by the funded initiatives.