Which of the Following Statements Is Correct

question 90

Multiple Choice

Which of the following statements is correct?

• A)Stock is a form of debt capital.
• B)Bonds are a form of debt capital.
• C)Stock must be repaid at maturity.
• D)Bonds do not have to be repaid at maturity.
• E)Interest payments to bondholders are at the discretion of the corporation.

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Definitions:

Portfolio

A collection of financial investments like stocks, bonds, commodities, and cash equivalents, as well as their mutual, exchange-traded, and closed-fund counterparts.

Proportion

A relationship between parts of a whole, expressed as a ratio or fraction, indicating how one part relates to another or to the whole.

Two-Asset Portfolio

A financial portfolio consisting of two different assets, aiming to diversify investment risks and returns.

Standard Deviation

A measure of the dispersion or spread of a set of numbers, indicating how much variation exists from the average.