Which of the Following Statements About the Term of a Bond

question 6

Multiple Choice

Which of the following statements about the term of a bond is correct?

• A)Term refers to the various characteristics of a bond, including its interest rate and tax treatment.
• B)The term of a bond is determined entirely by its credit risk.
• C)The term of a bond is determined entirely by how much sales commission the buyer of the bond pays when he or she purchases the bond.
• D)Interest rates on long-term bonds are usually higher than interest rates on short-term bonds.

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Definitions:

Operating Activities

Activities that constitute the primary or main activities of an entity, including the production, sales, and delivery of the company’s product as well as collecting payment from its customers.

Sale Proceeds

Sale proceeds refer to the total amount received from the sale of goods or assets before any deductions are made.

Equipment

Fixed assets used in the operations of a business to generate income, not intended for sale.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not directly related to the company's day-to-day operations.