Which of the Following Statements Regarding Bonds Is True

question 2

Multiple Choice

Which of the following statements regarding bonds is true?

• A) Bonds are liabilities of the issuer.
• B) Individuals investing in bonds receive dividends.
• C) Bonds cannot be purchased or sold prior to maturity.
• D) Income from bonds varies every year.
• E) The principal invested in bonds is not returned at the time of maturity.

---

Definitions:

Absolute Advantage

The ability of an entity to produce a good or perform a service at a lower cost per unit than another entity with the same resources.

Gains From Trade

The economic benefits or advantages that arise from trading goods, services, or resources between individuals, organizations, or countries, typically resulting from specialization and the division of labor.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, leading to more efficient trade possibilities.

Absolute Advantage

The ability of an entity to produce more of a good or service with the same amount of resources or the ability to produce the same amount with fewer resources than competitors.