_____________ Is a Promise of Future Payment Issued by a Firm

question 17

Multiple Choice

_____________ is a promise of future payment issued by a firm and guaranteed by a bank that is used to finance international trade with typical maturities ranging from one to six months.

• A)A negotiable certificate of deposit (NCD)
• B)A repurchase agreement
• C)Commercial paper
• D)A banker's acceptance
• E)none of the above

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Definitions:

Bond Buyer

An investor or entity that purchases bonds, which are debt securities issued by corporations or governments.

Interest Rate

It refers to the profit or cost of borrowing capital, typically expressed as an annual percentage.

Sound Finances

A term describing a stable and healthy financial condition characterized by manageable levels of debt and efficient budgeting.

Long-Term Bond

A long-term bond is a debt security with a maturity period typically longer than 10 years, offering interest payments over an extended time.