A Bond Is

question 69

Multiple Choice

A bond is:

• A) a financial asset that represents partial ownership of a company.
• B) a payment made periodically to all shareholders of a company.
• C) an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest.
• D) a promise by an issuer to pay a lump sum at a specified maturity date and, in some cases, to pay periodic interest at a specific percentage rate.

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Definitions:

Overdraft

An extension of credit from a lending institution when an account reaches zero, allowing for a negative balance.

Certified Check

A check verified by a bank, guaranteeing that the signer has sufficient funds in their account to cover the check's amount at the time of certification.

Stop-payment Order

A request made to a bank instructing it not to process a payment on a check or transaction that has been issued but not yet cashed.

Wrongful Payment

A payment made in error, either due to fraud, administrative error, or mistaken identity, which may require recovery.