Which Type of Mutual Fund Invests in Corporate Bonds with Maturities

question 31

Multiple Choice

Which type of mutual fund invests in corporate bonds with maturities in excess of 10 years?

• A)Junk bond fund
• B)Long-term corporate bond fund
• C)Municipal bond fund
• D)Short-term government bond fund
• E)World bond fund

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Definitions:

Degree of Financial Leverage

A measure that quantifies the sensitivity of a company's earnings per share to fluctuations in its operating income due to the use of fixed cost financing.

Earnings per Share

A company's net profit divided by the number of its common shares outstanding, indicating the company's profitability on a per-share basis.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Sales

The activity of selling goods or services in exchange for money or other compensation.