Which One of the Following Debt Instruments Guarantees Investors a Positive

question 10

Multiple Choice

Which one of the following debt instruments guarantees investors a positive real rate of return?

• A)zero coupon bond
• B)default-free, pure discount bond
• C)T-bill
• D)TIPS
• E)T-bond

---

Definitions:

Machine-Hours

A measure of production time wherein the focus is on the number of hours a machine is operated in the manufacturing of goods.

Casting Department

The casting department is a specialized segment within a manufacturing facility where metal casting processes are carried out to create metal parts.

Finishing Department

A section of a manufacturing company where goods are completed and prepared for sale.

Predetermined Overhead Rate

An estimated overhead rate used to allocate manufacturing overhead costs to products, calculated before the period begins.