Which of the Following Statements About the Characteristics of Debt

question 42

Multiple Choice

Which of the following statements about the characteristics of debt and equities is TRUE?

• A)They can both be long-term financial instruments.
• B)Bond holders are residual claimants.
• C)The income from bonds is typically more variable than that from equities.
• D)Bonds pay dividends.

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Definitions:

Tacos

A traditional Mexican dish consisting of a small hand-sized corn or wheat tortilla topped with a filling such as beef, pork, chicken, seafood, beans, vegetables, and cheese.

Burritos

A traditional Mexican dish consisting of a wheat flour tortilla wrapped or folded around a filling, which can include a variety of ingredients such as meat, beans, cheese, and vegetables.

Specialization

Concentration of production on a limited range of goods or services to increase efficiency and productivity, often leading to increased trade between economies.

Lemonade

A sweetened beverage made from lemon juice, water, and sugar, often served cold.