Which of the following statements about revenue bonds is true?

Revenue bonds are instruments issued to finance specific projects or enterprises, with their repayment derived from the revenues generated by those projects. This characteristic is what makes the statement about relying on specific project revenues true.

Unlike general obligation bonds, which are backed by the full faith and credit of the issuing government, revenue bonds specifically depend on the income produced by the project for which they are issued, such as tolls from a toll road or payments from a public utility. This reliance on project-generated income is what distinguishes revenue bonds from other types of bonds and underscores the importance of the project's financial viability to bondholders.

The other statements do not accurately reflect the nature of revenue bonds. They are not always guaranteed by the state; rather, their security comes from the revenue of the specific project, which can be quite variable. Yearly audits by the federal government are not a universal requirement for revenue bonds, although the issuing authority may have audit obligations as part of their governance. Additionally, revenue bonds are primarily issued by public entities such as municipalities or government agencies, although certain private-public partnerships may also issue them, making a blanket statement about private firms not applicable.