Which of the Following Financial Market Securities Would Probably Pay

question 50

Multiple Choice

Which of the following financial market securities would probably pay the highest interest rate?

• A) A bond issued by a large, well-established (blue chip) company.
• B) A bond issued by a start-up company in a newly emerging industry.
• C) A government bond issued by the government of France.
• D) They would all pay about the same rate of interest.

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Definitions:

Retained Earnings

Profits that a company keeps to use within the business after dividends have been paid out to shareholders.

Fiscal Year

A one-year period used for financial reporting and budgeting, which may or may not align with the calendar year.

Goods Sold

Goods sold refers to the total quantity of goods that a company has sold to its customers during a specific accounting period.

Asset Turnover Ratio

A financial ratio that measures the efficiency of a company at using its assets to generate sales or revenue.