A Security That Pays a Specified Cash Flow Over a Specific

question 36

Multiple Choice

A security that pays a specified cash flow over a specific period is called

• A)fixed income.
• B)stock option.
• C)mutual fund.
• D)real estate.

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Definitions:

Direct Financing Lease

A type of lease agreement where the lessor effectively finances the leased asset for the lessee, recognizing interest income over the lease term.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a financial charge in the income statement over the period of borrowing.

Interest Revenue

Income earned on investments like savings accounts, certificates of deposit, and bonds, typically presented within non-operating income on the income statement.

Current Ratio

A measure of liquidity calculated by dividing a company's current assets by its current liabilities, indicating how well it can cover its short-term obligations.