Which of the Following Statements About Financial Markets and Securities

question 44

Multiple Choice

Which of the following statements about financial markets and securities is TRUE?

• A)A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.
• B)A debt instrument is intermediate term if its maturity is less than one year.
• C)A debt instrument is intermediate term if its maturity is ten years or longer.
• D)The maturity of a debt instrument is the number of years (term)to that instrument's expiration date.

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Definitions:

Investment in Equipment

Capital expenditure on physical assets like machinery and equipment intended to be used in the production of goods or services.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in consistent annual amounts.

Remodelling

The process of updating or altering the structure, layout, or appearance of an existing building or space.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the context of evaluating investments or projects.