CPFO Debt Management Exam
Questions and Answers Graded A+
1.1.1 If it is not permissible to enter into swap transactions related to an entity's
debt, where would that be stated? - Correct answer-Debt Policy
1.1.1 What should be included in an entity's debt policy? - Correct answer-Debt
issuance process, managing the debt portfolio, guidelines for structuring
A downward sloping yield curve CANNOT be consistent with? - Correct answer-
Investors anticipate inflation will be lower in the future.
1.1.2 Which is true about LIBOR? - Correct answer-LIBOR can not be referenced
in new and needs to be phased out of existing financing contracts.
1.2.1 Do all governments have the same debt capacity? - Correct answer-No, each
government determines for themselves the appropriate level of debt capacity
consistent with state law.
2.1.1 What is the most important attribute of a GO bond? - Correct answer-
typically is backed by the full faith and credit of the government and its taxing
authority.
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, 2.1.2 All associated with revenue bond transaction? - Correct answer-debt service
reserve requirement, debt service coverage test, trust indenture
2.1.3 TANs, RANs, TRANs, BANs, and GANs are all types of: - Correct answer-
short term municipal note obligations
2.1.4 What determines if an entity can enter into a bank loan? - Correct answer-
state law and you have discussed the option with your municipal advisor and/or
others on your financing team and determined it is an optimal financing for your
entity.
2.1.5 Which one of these responsibilities do not apply to taxable debt? - Correct
answer-arbitrage tracking
2.1.6 Which of the following is a clear benefit of a negotiated sale bond offering in
contrast to a competitive sale bond offering? - Correct answer-Ability to target
specific kinds of investors
2.1.6 In which circumstance would an issuer be most likely to use a competitive
sale? - Correct answer-Issuer plans to sell bonds that are well understood by the
investor community.
2.1.7 In comparison to similar non-callable securities, callable securities have: -
Correct answer-Higher required and expected yields than non-callable securities
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Questions and Answers Graded A+
1.1.1 If it is not permissible to enter into swap transactions related to an entity's
debt, where would that be stated? - Correct answer-Debt Policy
1.1.1 What should be included in an entity's debt policy? - Correct answer-Debt
issuance process, managing the debt portfolio, guidelines for structuring
A downward sloping yield curve CANNOT be consistent with? - Correct answer-
Investors anticipate inflation will be lower in the future.
1.1.2 Which is true about LIBOR? - Correct answer-LIBOR can not be referenced
in new and needs to be phased out of existing financing contracts.
1.2.1 Do all governments have the same debt capacity? - Correct answer-No, each
government determines for themselves the appropriate level of debt capacity
consistent with state law.
2.1.1 What is the most important attribute of a GO bond? - Correct answer-
typically is backed by the full faith and credit of the government and its taxing
authority.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, 2.1.2 All associated with revenue bond transaction? - Correct answer-debt service
reserve requirement, debt service coverage test, trust indenture
2.1.3 TANs, RANs, TRANs, BANs, and GANs are all types of: - Correct answer-
short term municipal note obligations
2.1.4 What determines if an entity can enter into a bank loan? - Correct answer-
state law and you have discussed the option with your municipal advisor and/or
others on your financing team and determined it is an optimal financing for your
entity.
2.1.5 Which one of these responsibilities do not apply to taxable debt? - Correct
answer-arbitrage tracking
2.1.6 Which of the following is a clear benefit of a negotiated sale bond offering in
contrast to a competitive sale bond offering? - Correct answer-Ability to target
specific kinds of investors
2.1.6 In which circumstance would an issuer be most likely to use a competitive
sale? - Correct answer-Issuer plans to sell bonds that are well understood by the
investor community.
2.1.7 In comparison to similar non-callable securities, callable securities have: -
Correct answer-Higher required and expected yields than non-callable securities
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
