A Disadvantage of Bonds Is

question 87

Multiple Choice

A disadvantage of bonds is:

• A)Bonds require payment of periodic interest.
• B)Bonds require payment of par value at maturity.
• C)Bonds can decrease return on equity.
• D)Bond payments can be burdensome when income and cash flow are low.
• E)All of the choices are correct.

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Definitions:

Market Price

The price at which a product, asset, or service is sold on the open market.

Residual Interest

The remaining interest or value that an entity has in an asset after deducting any liabilities or obligations related to that asset.

Entity

In accounting and finance, an entity refers to any organization, company, or individual that has a separate legal existence and can engage in economic activities and transactions.

Third Parties

Individuals or entities that are involved in a transaction or agreement but are not one of the principal parties.