Most of the Bonds That Are Bought and Sold Are

question 266

Multiple Choice

Most of the bonds that are bought and sold are not transacted on the organized exchanges.They are bought and sold through bond dealers who do not sell many ________ bonds but do trade many ________ bonds in the secondary market.

• A) corporate; government
• B) government; corporate
• C) high par value; corporate
• D) government; low par value
• E) corporate; firm-specific bonds

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Definitions:

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Allowance Method

An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.

Bad Debts

Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.

Sales

The transactions involving the exchange of goods or services for money.