An Unsecured Bond, Backed Only by the Well-Respected Name of the Organization

question 128

Multiple Choice

An unsecured bond, backed only by the well-respected name of the organization, is called a ________ bond.

• A) mortgage
• B) leveraged
• C) debenture
• D) convertible

Compare bonds and long-term notes in terms of their dealings with lenders.

Understand the tax implications of owning coupon bonds.

Comprehend the structure and implications of installment notes.

Understand the concept of compound interest.

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Definitions:

Producing

The process of creating, manufacturing, or bringing forth goods and services for consumption or use.

Pizza

A popular dish of Italian origin consisting of a flat, round base of dough baked with a topping of tomato sauce and cheese, often with added meat, fish, or vegetables.

Production Possibility Frontier

A model that illustrates the trade-offs facing an economy that produces only two goods. It shows the maximum quantity of one good that can be produced for any given quantity produced of the other.

Autarky Price

The price of a good or service in a closed economy that does not engage in trade with other economies.