Which of the Following Are Advantages of Owning Bonds

question 94

Multiple Choice

Which of the following are advantages of owning bonds?
I. diversification properties
II. higher long-term returns than equity holdings
III. current income
IV. lower risk than stocks

• A) I and II only
• B) I, III and IV only
• C) I, II and III only
• D) I, II, III and IV

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Definitions:

Net Proceeds

The amount of money received from a sale after subtracting all related expenses and costs.

Fair Value

Amount for which a security could be sold in a normal market.

Trading Securities

Securities bought and held primarily for sale in the near term to generate income on short-term price differences.

Unrealized Gain

The increase in value of an asset that has not been sold yet, therefore the gain is not reflected in the income statement.