Which One of These Definitions Is Correct

question 39

Multiple Choice

Which one of these definitions is correct?

• A)Negative covenant: a "thou shalt" agreement
• B)Premium bond: bond that sells for less than face value
• C)Dirty price: market price,excluding accrued interest
• D)Call provision: issuer's right to repurchase a bond prior to maturity
• E)Unfunded debt: long-term corporate debt

Acknowledge different types of bonds and their characteristics.

Realize the operational and legal aspects of bond issuance and management.

Interpret the tax implications and unique features of zero coupon bonds.

Explain the financial strategies behind certain bond features such as convertibility and call provisions.

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Definitions:

Financial Accounting

The branch of accounting that involves the process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time.

Managerial Accounting

The practice of analyzing, interpreting, and presenting financial information for internal management use in planning, decision-making, and operational control.

Management

The process of dealing with or controlling things or people, often within the context of a business or organization.

Proprietorships

Business entities owned by a single individual, who has full control over operations and takes on the liabilities of the business personally.