Series 7 Exam Question 280: Answer and Explanation

Question: 280

RANs, BANs, TANs, and CLNs are issued by municipalities seeking

• A. to insure their municipal securities
• B. the approval of the SEC
• C. long-term financing
• D. short-term financing

Correct Answer: D

Explanation:

D. Municipal short-term notes such as RANs (revenue anticipation notes), BANs (bond anticipation notes), TANs (tax anticipation notes), and CLNs (construction loan notes) are used to provide short-term (interim) financing until a permanent, long-term bond issue is floated, until tax receipts increase, or until revenue flows in.