Which of the following are examples of municipal obligations with maturities of less than one year?

Which of the following are examples of municipal obligations with maturities of less than one year?

• A. Treasury bills
• B. Revenue anticipation notes
• C. Tax anticipation notes
• D. Certificates of deposit

Answer: (B)

Revenue anticipation notes are short-term municipal securities designed to provide immediate financing to municipalities, typically with maturities of less than one year. They are issued in anticipation of future revenue receipts, such as taxes or fees, which the municipality expects to collect. This characteristic makes them particularly useful for managing cash flow interruptions or timing mismatches between revenue inflows and expenditure needs. Municipal obligations serve various purposes within state and local financing, and those that have short maturities, like revenue anticipation notes, allow municipalities to address urgent financial needs without a long-term indebtedness commitment. This distinguishes them from longer-term debt options, providing a flexible and timely funding solution when necessary, ultimately supporting the overall financial health of the municipality.

Revenue anticipation notes are short-term municipal securities designed to provide immediate financing to municipalities, typically with maturities of less than one year. They are issued in anticipation of future revenue receipts, such as taxes or fees, which the municipality expects to collect. This characteristic makes them particularly useful for managing cash flow interruptions or timing mismatches between revenue inflows and expenditure needs.

Municipal obligations serve various purposes within state and local financing, and those that have short maturities, like revenue anticipation notes, allow municipalities to address urgent financial needs without a long-term indebtedness commitment. This distinguishes them from longer-term debt options, providing a flexible and timely funding solution when necessary, ultimately supporting the overall financial health of the municipality.