Which of the Following Statements Is True About Bonds

question 97

Multiple Choice

Which of the following statements is true about bonds?

• A) Sellers of newly issued bonds are borrowers.
• B) When the government and large corporations want to borrow money they buy bonds.
• C) A bond owner must hold a bond until it matures.
• D) The interest rate on a bond is directly related to its price.

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Definitions:

Promissory Notes

Written promises to pay a specified sum of money to a certain person or entity at a defined time or on demand.

Legal Claim

A demand for compensation, payment, or property by a person or entity asserting a right against another in a court of law.

Note Receivable

A financial asset representing a written promise to receive a specific amount of money, plus interest, at a future date.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.