Bonds in a Particular Company Started as Apparently Safe Investments

question 10

Multiple Choice

Bonds in a particular company started as apparently safe investments but they have now become more risky. They are currently rated as below investment grade. What name is given to bonds of this type?

• A) Junk bonds
• B) CCC bonds
• C) Vanilla bonds
• D) Fallen angels

---

Definitions:

Income Tax Allocation

The process of assigning the income tax expense or benefit to various accounting periods or components.

ASPE

Accounting Standards for Private Enterprises; a set of accounting policies and principles developed for use by private companies in Canada.

Jointly Controlled Enterprises

A business arrangement between two or more parties who share control over the business operations and decision-making process.

Proportionate Consolidation

An accounting method where an investor entity combines its share of each of the assets, liabilities, income, and expenses of a jointly controlled entity with similar items, line by line, in its financial statements.