Bonds That Mature at More Than One Date with the Result

question 178

Multiple Choice

Bonds that mature at more than one date with the result that the principal amount is repaid over a number of periods are known as:

• A)Registered bonds.
• B)Bearer bonds.
• C)Callable bonds.
• D)Sinking fund bonds.
• E)Serial bonds.

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Definitions:

Maturity

The time at which a financial instrument, investment, or insurance policy reaches its final value and the principal is repaid or returned.

Interest

The price paid for the opportunity to use borrowed finances, generally expressed through an annual percentage.

Simple Interest

Interest calculated only on the principal amount, or on that part of the principal amount which remains unpaid.

Principal

The principal refers to the initial amount of money lent or invested, excluding any interest or growth.