Which of the Following Is Not True of a Standard

question 13

Multiple Choice

Which of the following is not true of a standard floating-rate note on a coupon reset date?

• A)The next coupon payment is set based on prevailing market rates.
• B)The principal is unchanged.
• C)The ex-coupon price (the price of the note not including the coupon immediately due)of the note is par.
• D)The cum-coupon price (the price of the note including the coupon immediately due)is par.

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Definitions:

Estimated Liability

A probable future outflow of resources, arising from past transactions or events, the amount of which is not certain.

Cash Discounts

A reduction in invoice amount offered by sellers to buyers as an incentive for early payment.

Trade Accounts Payable

Liabilities owed to suppliers for goods and services received that are yet to be paid for by the business.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and equity at a specific point in time, showing the company's financial condition.