Which One of the Following Statements Is True in Regards

question 74

Multiple Choice

Which one of the following statements is true in regards to municipal bond insurance?

• A) The insurance premium is paid by the bondholders.
• B) The insurance can be cancelled with 30 days notice to the bond issuer.
• C) The financial strength of the bond issuer can affect the bond's credit rating.
• D) Insured bonds tend to sell at lower prices than uninsured bonds.
• E) To date, bond insurers have not had to pay any payments for bond defaults.

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Definitions:

Adjusting Entries

End-of-period accounting insertions to correctly allocate revenues and costs to the specific timeframe in which they occurred.

Prepaid Expenses

Prepaid Expenses are future expenses that have been paid in advance and are recorded as assets on a balance sheet until they are realized as an expense.

Unearned Revenues

Money received by a business for services or goods not yet delivered or rendered to the customer.

Profit Margin

A financial metric that measures the amount by which revenue from sales exceeds costs in a business, expressed as a percentage of revenue.