Define Liquidity Risk,default Risk,and Taxability Risk and Explain How These

question 12

Essay

Define liquidity risk,default risk,and taxability risk and explain how these risks relate to bonds and bond yields.

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Definitions:

Revenue Recognition Principle

An accounting principle that outlines the specific conditions under which revenue is recognized.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the service period has not occurred.

Unearned Service Revenue

Income received by a company for services yet to be performed; considered a liability until the service is delivered.