Which One of the Following Statements Is Correct

question 343

Multiple Choice

Which one of the following statements is correct?

• A) A convertible bond can be exchanged for shares of stock.
• B) The issuer can deduct the repayment of the bond principal as a business expense for tax purposes.
• C) A zero coupon bond is sold at a deep premium.
• D) A "fallen angel" is a coupon bond that has converted to a zero coupon bond.
• E) Corporate bonds are quoted in 32nds.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, leading to its net profit or loss.

Interest Dates

The specific dates on which interest payments on a debt or investment are made to bondholders or lenders.

Accrued Interest

Interest that has been earned but not yet received or recorded as of a specific date, often related to bonds or loans.

Investment in Bonds

Purchasing debt securities issued by corporations or governments to earn interest income and potentially benefit from bond price appreciations.