A Bond Is

question 90

Multiple Choice

A bond is

• A) a claim on the assets of a corporation such that the purchaser has an ownership right in the corporation.
• B) anything of value to which the firm has a legal claim.
• C) a means of assuring that the business firm will pay its debts or fulfill other legal obligations.
• D) a promise to pay for the use of someone else's money.

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Definitions:

Initial Margin

The minimum amount of funds required to open a new position in a market, serving as a security deposit to cover credit risk.

Futures Price

The agreed-upon price for the future delivery of an asset such as a physical commodity or a financial instrument, as determined in the futures market.

Creation

The process of originating something new or bringing something into existence, often used in contexts ranging from art to finance.

Futures Contract

A legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future.