Which One of the Following Bonds Is Most Apt to Have

question 21

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:

Net Cash Flow

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been expensed over time through depreciation.

Original Cost

The initial monetary value of an asset or investment, reflecting the purchase price or production cost before adjustments like depreciation or amortization.

Gain on Sale

Profit realized from the sale of assets or investments when the selling price exceeds the book value.