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:

User Cost

The cost of using a good or service, including the opportunity cost of forgone alternatives and the depreciation of the good's own value over time.

Government Regulation

The imposition of laws and rules by government aimed at affecting the behavior of individuals and industries to achieve societal goals.

Extraction Cost

The cost associated with the removal of raw materials from the earth, which can influence the price of goods.

Property Rights

Legal rights to possess, use, and dispose of assets including real property, intellectual property, and other possessions.