A Bond That Is Backed Only by the Reputation of the Issuing

question 25

Multiple Choice

A bond that is backed only by the reputation of the issuing corporation is called a(n) ________ bond.

• A)debenture
• B)mortgage
• C)indenture
• D)preemptive
• E)treasury

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Definitions:

Capital Investment Decisions

Decisions made by businesses regarding which major projects or investments to undertake, considering potential returns and risks.

Long-Term Commitment

An obligation that extends beyond the current fiscal year, often related to contracts, investments, or financial agreements.

Operations

The day-to-day activities involved in running a business, such as production, sales, and administration.

Residual Value

The estimated value that an asset will have at the end of its useful life, after depreciation has been deducted.