General obligation bonds generally have which characteristic regarding interest rates?

General obligation bonds are typically backed by the full faith and credit of a government entity, such as a city or state, which includes the authority to levy taxes to pay bondholders. This strong backing contributes to their perceived safety and stability as an investment. Because they're seen as very low risk, general obligation bonds generally offer lower interest rates compared to other long-term debt options.

Investors view these bonds favorably due to their secure backing, leading to less demand for higher yields that correspond with higher risk. For this reason, they are able to provide interest rates that are lower than those of revenue bonds, corporate bonds, or other forms of debt that carry more risk. This characteristic makes them an attractive option for both issuers, as they can borrow at lower costs, and for investors, as they are secure investments.

In contrast, the other options present characteristics that do not align with general obligation bonds. For example, bonds with the highest interest rates would instead be more aligned with higher-risk securities, those secured only by collateral might refer to secured bonds like revenue bonds, and variable interest rates are not a common characteristic of general obligation bonds which typically offer fixed rates.