A Distinction Between Stocks and Bonds Is That

question 125

Multiple Choice

A distinction between stocks and bonds is that

• A)bonds cannot be sold to anyone other than the company that issued it while stocks can be resold to anyone.
• B)bonds can be traded many times in the bond market, while stocks are non-transferable.
• C)stocks represent ownership claims to the company and bonds do not.
• D)bonds must be held for a fixed number of years whereas stocks can be bought and sold at any time.
• E)although the return on a bond is determined by the forces of supply and demand, the return on a stock is set by the stock exchange.

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Definitions:

Direct Labor Costs

Expenses associated with the wages and benefits of employees who directly work on the production of goods.

Cash Account

An account that tracks the amount of cash available to a business or individual.

Raw Materials Inventory

The total cost of all the materials kept in stock that have not yet been used in manufacturing.

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues but before deducting taxes and interest.