18. In the previous question, how could the government realize an economic gain in 2023?

a. By no means, because debt refinances never result in economic gains. b. If the "old" bonds had a call price in 2023 and that call price is less than the market price

of those bonds. c. If the "old" bonds had a call price in 2028 and the government performs "in-substance

defeasance". d. Both b and c are correct.

19. A government issued bonds to be paid with a special assessment to a particular sector of property owners. The government let bondholders know that the property owners were responsible for paying for the bonds. The government will only collect from the property owners and send the money to the bondholders. In the government's financial statements, the debt on these bonds:

1. Is not presented and does not need to be disclosed.

2. Is not presented, but it needs to be disclosed.

3. Is required to be presented because the government was the one that issued the bonds.

4. Is required to be presented because the property owners are residents of that

   government.

20. GASB rules require all assets to be depreciated for government-wide purposes, except land and:

a. Capitalized artworks b. Donated assets c. Infrastructure assets d. Infrastructure assets accounted for under the modified approach

21. If a government chooses the modified approach for certain infrastructure assets, the costs to preserve those assets:

a. Will be expensed as incurred and there are no additional disclosure requirements. b. Will be expensed as incurred and the condition status of such assets is required to be disclosed. c. Are capitalized and depreciated. d. Are capitalized, but not depreciated.

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22. What criteria must the government meet in order not to capitalize a collection?

1. The collection is for public display, research, or education

2. The collection is cared for, protected and free of encumbrances

3. The collection is subject to a policy that states that if all or part of the collection is sold,

   the money received will be used for the direct care of other collections or to purchase other collections.

23. When it comes to an investment, the risk of the other party not fulfilling its obligation is known as:

a. Counterparty risk b. Investment risk c. Credit risk d. Interest rate risk

24. Financing projects with bonds backed by particular sources of revenue (revenue bonds) is generally more expensive (higher interest rates) than if we finance with general obligation bonds. Still, what could motivate a government to use this funding?

a. This type of debt (revenue bonds) may not be subject to legal or constitutional limits. b. The government can incorporate the cost of interest into the fees it charges users of facilities financed with this debt. c. Both "a" and "b" are correct

d. Neither "a" nor "b" are correct.

25. Bonds that the government issues for the benefit of private entities, for-profit or not-for- profit, are identified as:

a. Overlapping debt c. Special tax debt b. Conduit debt d. Debt of Moral Obligation

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