Which of the Following Statements Is True About a Zero

question 16

Multiple Choice

Which of the following statements is true about a zero coupon bond?

• A)A zero coupon bond is taxed as a capital gain at the time the bond matures.
• B)A zero coupon bond is issued at a substantial discount below its par value.
• C)A zero coupon bond is issued at a coupon rate that adjusts for inflation.
• D)The interest received every year on a zero coupon bond is taxed as interest income.
• E)The discount on the issue of a zero coupon bond is written off over its life in the investor's financial statement.

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Definitions:

Work Stoppages

Events where workers cease operations, often as a form of protest or to negotiate better working conditions or wages.

Neutral Third Party

An unbiased individual or group not directly involved in a dispute or negotiation, brought in to facilitate a resolution or agreement.

Conciliation Service

An intermediary service that facilitates negotiation between conflicting parties to reach an agreement, often used in labor disputes.