Which statement about revenue bonds is NOT true?

Revenue bonds are a type of municipal bond that finance income-producing projects and are secured by the revenue generated from those projects, such as tolls from a toll road or fees from a hospital. The statement regarding revenue bonds paying lower rates of interest than general obligation bonds is not true because, in fact, they often carry higher interest rates compared to general obligation bonds.

General obligation bonds, which are backed by the full faith and credit of the issuing municipality and are often considered safer investments, usually come with lower interest rates as they are less risky. Revenue bonds, on the other hand, are tied to the revenue generation capabilities of specific projects and, due to the higher risk associated with that, they typically offer higher interest rates to attract investors.

Moreover, the other statements about revenue bonds are accurate. They can be issued without voter approval because they are not dependent on tax income and are secured by project revenue. They can also be issued even if a locality has reached its debt limits, which is a significant advantage for funding certain projects. Additionally, revenue bonds are often exempt from federal income taxes, making them an attractive option for investors looking for tax-efficient returns.

Overall, understanding the nature of revenue bonds and how they differ from general obligation bonds is