Municipal Bonds
Under a net revenue pledge for a municipal revenue bond, what is paid FIRST from collected revenues?
Under a net revenue pledge (the most common type), operation and maintenance (O&M) expenses are paid first. Debt service is paid second, from the "net" revenues remaining after O&M. This differs from a gross revenue pled
Complete Analysis & Legal Rationale
Under a net revenue pledge (the most common type), operation and maintenance (O&M) expenses are paid first. Debt service is paid second, from the "net" revenues remaining after O&M. This differs from a gross revenue pledge, where debt service is paid first.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.