Which of the Following Is Not a Reason Why Bonds

question 5

Multiple Choice

Which of the following is not a reason why bonds are considered safer than most other types of securities?

• A)The annual income received is flexible
• B)The contracted-for loan principal is likely to be repaid in full at the stated date
• C)Should bankruptcy occur,bondholders have priority in receiving the proceeds from liquidation of business assets
• D)All of the above are reasons why bonds are considered safer
• E)None of the above is a reason why bonds are considered safer

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Definitions:

Owner's Capital

This represents the total equity invested by the owners in a company plus any retained earnings, indicative of the net worth of the company from the owner's perspective.

Total Assets

Total assets represent the sum of all assets owned by an individual or organization, including both current and non-current assets.

Cash

Physical form of currency, such as coins and banknotes, used to conduct transactions.

Rental Fees

Charges paid for the use of property or equipment, typically on a periodic basis like monthly or annually, under a leasing or rental agreement.