The Written Pledge of a Government or a Municipality to Repay

question 72

Multiple Choice

The written pledge of a government or a municipality to repay a specified sum of money along with interest is called a _________

• A)mutual fund.
• B)government bond.
• C)guaranteed investment certificate.
• D)government stock.
• E)option fund.

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Definitions:

Incentive Fee

A fee paid to a fund manager based on performance; typically a percentage of the fund's profits.

Risk-free Interest Rate

The yield from an investment that carries no risk of losing money, often linked to government securities.

Exercise Price

The predetermined price at which the option holder can buy (call option) or sell (put option) the underlying security.

Incentive Bonuses

Additional compensation given to employees as a form of encouragement to exceed performance goals.