CGFM EXAM 3 | NEWEST ACTUAL EXAM
COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS GRADED A+ | 100%
PASS | 2025 UPDATE!
IV 1. The city's decision to purchase bond insurance for park
enhancement debt should include consideration of - ✔✔✔ Correct
Answer > Correct Answer: desired interest rates.
IV 2. What role do credit rating agencies serve in the issuance of local
government debt? - ✔✔✔ Correct Answer > Correct Answer: to
provide an independent assessment of the entity's risk of default on
payments
IV 3. A characteristic of debt issued by the federal government
compared to debt issued by state or local governments is that federal
debt - ✔✔✔ Correct Answer > Correct Answer: may be used for
operating expenses.
IV 4. A city is considering financing the construction of an international
airport. All of the following factors are pertinent to this consideration
EXCEPT the - ✔✔✔ Correct Answer > Correct Answer: operating
expenses of the existing airport.
,IV 5. A real estate development corporation built a level 1 trauma
center hospital in a city for a cost of $300 million. The city signed a 25-
year lease with the corporation in conjunction with the development
effort. This financing arrangement is an example of - ✔✔✔ Correct
Answer > Correct Answer: a public-private partnership.
IV 6. A debt limit is defined as a limit on the - ✔✔✔ Correct Answer >
Correct Answer: total debt that can be outstanding at any time.
IV 7. Governments may increase consumption tax rates in order to -
✔✔✔ Correct Answer > Correct Answer: discourage the purchase of
certain goods or services.
IV 8. An effective debt policy guards against - ✔✔✔ Correct Answer >
Correct Answer: excessive debt and exceeding legal debt limits.
IV 9. In order for a state to provide backing of school bonds "in full-faith
and credit guarantees," the program must be identified in - ✔✔✔
Correct Answer > Correct Answer: state law.
IV 10. The use of public-private partnerships is likely to grow because of
increased - ✔✔✔ Correct Answer > Correct Answer: government
budget pressures.
,IV 11. A state's human service department receives a voluntary
contribution from an individual whose recently-deceased, disabled
sister received food and Medicaid from the department. The revenue
should be reported as - ✔✔✔ Correct Answer > Correct Answer: a
donation.
IV 12. A state disbursed $4.7 million income in tax revenues to a county
in 2015. The county did not perform any specific services for the state,
there were no specific restrictions upon how the county was to use the
funds, and there were no reporting requirements associated with
accepting the funds. This is an example of - ✔✔✔ Correct Answer >
Correct Answer: shared revenues.
IV 13. All of the following are examples of goals supported by tax
expenditures EXCEPT to - ✔✔✔ Correct Answer > Correct Answer:
encourage the consumption of goods covered by excise taxes.
IV 14. The definition of a tax expenditure is - ✔✔✔ Correct Answer >
Correct Answer: revenue lost through exceptions in the tax code.
IV 15. A property has an assessed value of $350,000 and a levy rate of
25 mills. What would the annual tax bill be? - ✔✔✔ Correct Answer >
Correct Answer: $8,750
IV 16. Which of the following are requirements and expectations of
grantors? - ✔✔✔ Correct Answer > Correct Answer: Matching funds
, and level of effort are met, and the difference between allowable and
unallowable program costs is upheld.
IV 17. Which principle regarding government debt states that loaned
funds should be obtained at the lowest cost possible relative to the
risk? - ✔✔✔ Correct Answer > Correct Answer: efficiency
IV 18. The state treasurer charges the greater of the application fee of
$5,000 or a transaction fee of not more than .05% of the total principal
and interest payable for a debt guarantee. A school district issued a 10-
year bond at the par amount of 50 million dollars with a simple interest
rate of 1.5%. The state treasurer would charge - ✔✔✔ Correct
Answer > Correct Answer: $25,375
IV 19. The most common purpose of debt at state and local levels is to -
✔✔✔ Correct Answer > Correct Answer: fund capital improvements.
IV 20. Which type of grant provides the grantee the greatest amount of
discretion regarding the use of the grant funds? - ✔✔✔ Correct
Answer > Correct Answer: block grants
IV 21. A city issues debt to construct a bridge, primarily for the purpose
of financing the cost of the bridge over its expected useful life. This is
an example of - ✔✔✔ Correct Answer > Correct Answer: equity.
COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS GRADED A+ | 100%
PASS | 2025 UPDATE!
IV 1. The city's decision to purchase bond insurance for park
enhancement debt should include consideration of - ✔✔✔ Correct
Answer > Correct Answer: desired interest rates.
IV 2. What role do credit rating agencies serve in the issuance of local
government debt? - ✔✔✔ Correct Answer > Correct Answer: to
provide an independent assessment of the entity's risk of default on
payments
IV 3. A characteristic of debt issued by the federal government
compared to debt issued by state or local governments is that federal
debt - ✔✔✔ Correct Answer > Correct Answer: may be used for
operating expenses.
IV 4. A city is considering financing the construction of an international
airport. All of the following factors are pertinent to this consideration
EXCEPT the - ✔✔✔ Correct Answer > Correct Answer: operating
expenses of the existing airport.
,IV 5. A real estate development corporation built a level 1 trauma
center hospital in a city for a cost of $300 million. The city signed a 25-
year lease with the corporation in conjunction with the development
effort. This financing arrangement is an example of - ✔✔✔ Correct
Answer > Correct Answer: a public-private partnership.
IV 6. A debt limit is defined as a limit on the - ✔✔✔ Correct Answer >
Correct Answer: total debt that can be outstanding at any time.
IV 7. Governments may increase consumption tax rates in order to -
✔✔✔ Correct Answer > Correct Answer: discourage the purchase of
certain goods or services.
IV 8. An effective debt policy guards against - ✔✔✔ Correct Answer >
Correct Answer: excessive debt and exceeding legal debt limits.
IV 9. In order for a state to provide backing of school bonds "in full-faith
and credit guarantees," the program must be identified in - ✔✔✔
Correct Answer > Correct Answer: state law.
IV 10. The use of public-private partnerships is likely to grow because of
increased - ✔✔✔ Correct Answer > Correct Answer: government
budget pressures.
,IV 11. A state's human service department receives a voluntary
contribution from an individual whose recently-deceased, disabled
sister received food and Medicaid from the department. The revenue
should be reported as - ✔✔✔ Correct Answer > Correct Answer: a
donation.
IV 12. A state disbursed $4.7 million income in tax revenues to a county
in 2015. The county did not perform any specific services for the state,
there were no specific restrictions upon how the county was to use the
funds, and there were no reporting requirements associated with
accepting the funds. This is an example of - ✔✔✔ Correct Answer >
Correct Answer: shared revenues.
IV 13. All of the following are examples of goals supported by tax
expenditures EXCEPT to - ✔✔✔ Correct Answer > Correct Answer:
encourage the consumption of goods covered by excise taxes.
IV 14. The definition of a tax expenditure is - ✔✔✔ Correct Answer >
Correct Answer: revenue lost through exceptions in the tax code.
IV 15. A property has an assessed value of $350,000 and a levy rate of
25 mills. What would the annual tax bill be? - ✔✔✔ Correct Answer >
Correct Answer: $8,750
IV 16. Which of the following are requirements and expectations of
grantors? - ✔✔✔ Correct Answer > Correct Answer: Matching funds
, and level of effort are met, and the difference between allowable and
unallowable program costs is upheld.
IV 17. Which principle regarding government debt states that loaned
funds should be obtained at the lowest cost possible relative to the
risk? - ✔✔✔ Correct Answer > Correct Answer: efficiency
IV 18. The state treasurer charges the greater of the application fee of
$5,000 or a transaction fee of not more than .05% of the total principal
and interest payable for a debt guarantee. A school district issued a 10-
year bond at the par amount of 50 million dollars with a simple interest
rate of 1.5%. The state treasurer would charge - ✔✔✔ Correct
Answer > Correct Answer: $25,375
IV 19. The most common purpose of debt at state and local levels is to -
✔✔✔ Correct Answer > Correct Answer: fund capital improvements.
IV 20. Which type of grant provides the grantee the greatest amount of
discretion regarding the use of the grant funds? - ✔✔✔ Correct
Answer > Correct Answer: block grants
IV 21. A city issues debt to construct a bridge, primarily for the purpose
of financing the cost of the bridge over its expected useful life. This is
an example of - ✔✔✔ Correct Answer > Correct Answer: equity.
