Which of the Following Statements About the Term of a Bond

question 35

Multiple Choice

Which of the following statements about the term of a bond is correct?

• A)Term refers to the various characteristics of a bond,including its interest rate and tax treatment.
• B)The term of a bond is determined entirely by its credit risk.
• C)The term of a bond is determined entirely by how much sales charge the buyer of the bond pays when he or she purchases the bond.
• D)Interest rates on long-term bonds are usually higher than interest rates on short-term bonds.

Comprehend how to calculate percentage changes and interpret their significance in financial analysis.

Recognize the importance of qualitative and quantitative indicators in financial statement analysis reports.

Grasp the concepts of liquidity, earnings per share, trend analysis, and ratio analysis in evaluating financial health.

Understand the use of trend percents in analyzing financial statements.

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Definitions:

Saving

The portion of income not spent on consumption but kept aside for future use, which may be invested to generate wealth.

Disposable Income

The amount households can devote to saving and spending once income taxes have been factored in.

Savings

The portion of disposable income not spent on consumption of consumer goods but accumulated or invested.

Disposable Income

The financial surplus households hold for spending and saving after income taxes have been applied.