What is true regarding a general obligation bond held by an investor?

A general obligation bond is a type of municipal bond that is secured by the issuing municipality's pledge to use its taxing power to repay bondholders. This means that the responsibility for making interest and principal payments ultimately falls on the municipality itself, which typically draws funds from tax revenues. This broad backing gives investors a relatively high level of security, as these bonds are supported by the general fiscal health and revenue-generating capacity of the municipality.

The other options do not accurately describe general obligation bonds. They are not backed by specific revenue sources, which would be characteristic of revenue bonds. While general obligation bonds may offer predictable payments, they do not necessarily guarantee a fixed interest rate over time, as interest rates can be influenced by various market factors and can fluctuate. Finally, many general obligation bonds are rated by credit agencies to provide investors with a measure of credit risk, so stating that they are typically unrated does not represent the full picture.