An Unsecured Bond, Backed Only by the Well-Respected Name of the Organization

question 128

Multiple Choice

An unsecured bond, backed only by the well-respected name of the organization, is called a ________ bond.

• A) mortgage
• B) leveraged
• C) debenture
• D) convertible

---

Definitions:

Annual Net Cash Flows

The difference between a company's cash inflows and outflows within a fiscal year.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Present Value Index

A financial metric that evaluates the profitability of an investment or project by comparing the present value of cash inflows to the present value of cash outflows.

Compound Interest

This concept involves calculating interest on the original investment or loan amount, in addition to the interest that has compounded from past periods.