Which One of the Following Bonds Is Most Apt to Have

question 29

Multiple Choice

Which one of the following bonds is most apt to have the highest interest rate? All of the bonds mature in 10 years.

• A) Bond that is rated CCC
• B) Mortgage bond that is rated AAA
• C) Debenture bond that is rated BBB
• D) Convertible bond that is rated BBB
• E) Bond that is rated A

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders from earnings, typically in the form of cash.

Market Price

The existing rate at which an asset or service is traded in the open market.

Return on Total Assets

A financial ratio that measures a company's ability to generate earnings from its assets, indicating the effectiveness of asset use.

Net Income

Net Income is the total earnings of a company after subtracting all expenses, including taxes and costs, from its total revenue, reflecting the company's profitability.