ABC Jewels Issues Some Unsecured Debt with a 6-Month Maturity

question 17

Multiple Choice

ABC Jewels issues some unsecured debt with a 6-month maturity. This debt is classified as a

• A) Call option
• B) Futures contract
• C) Money market instrument
• D) Fixed-income securities
• E) Derive security

---

Definitions:

Assigned Value

A valuation determined for an asset or liability, often used in accounting to assign costs or values.

Risk Adjusted NPV

Net Present Value method adjusted for the risk associated with the uncertain cash flows, taking into account the variability of returns and the cost of capital.

Initial Cost

The initial expenditure required to acquire an asset, including the purchase price and any additional costs necessary to get the asset ready for its intended use.

Cash Inflows

Funds that are received, whether from business operations, investment returns, or financing activities.