General Obligation Bonds are secured by:

• A. The taxing power of the issuing jurisdiction
• B. The revenue generated by a project
• C. The issuer's mortgage on property
• D. A federal guarantee

Answer: (A)

General obligation bonds are backed by the issuing jurisdiction’s taxing power. The issuer pledges its full faith and credit to debt service, typically using ad valorem taxes or other authorized taxes to pay interest and principal. This broad tax pledge means the debt is supported by the government’s ability to raise revenue across the jurisdiction, rather than by revenues from a specific project. That’s why these bonds are generally viewed as safer than bonds tied to a project's revenues. The other options describe structures that don’t apply to GO bonds: bonds secured by a project’s revenue, a mortgage on property, or a federal guarantee, none of which is how GO debt is typically secured.