A ______________ Is a Promise to Fix or Replace the Good

question 44

Multiple Choice

A ______________ is a promise to fix or replace the good, at least for a certain period of time.

• A) service contract
• B) insurance policy
• C) money-back guarantee
• D) warranty

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Definitions:

Call Features

Provisions embedded in financial instruments, like bonds, that allow the issuer to repurchase or redeem the instrument before its maturity date.

Call Penalties

Fees or costs that a borrower must pay a lender for the privilege of paying a loan off earlier than the agreed payment schedule.

Call Premiums

The amount by which the price of a callable bond or preferred stock exceeds its par value or redemption price, often stipulated as a penalty for early redemption by the issuer.

Coupon Rates

Interest rates specified on bonds or other fixed-income securities that issuers promise to pay bondholders annually, expressed as a percentage of face value.